Expert: Incoming Bank Governor Will Have to Weaken the Shekel

Economic analyst Dr. Gideon Ben Nun, CEO of Agio Risks Management & Financial Decisions, has told the website Sponsor that incoming Governor Frenkel will have to deal with Israel's sizzling hot real estate market, before it's too late

"This week again we observed volatility in trading, with shekel ranging in value from $3.60 to $3.65, even as the dollar has been getting stronger against the world's major currencies," says Ben-Nun.

Since the strong shekel is hurting two of Israel's main economic sectors – exports and tourism – Frankel is expected to devise moves with the Finance Ministry as soon as he takes office, to bring down the value of the shekel.

Frankel has been known in the past for his preference for high interest rates. But in today's environment, with low interests all around and with low inflation, it would be interesting to see how the new bank governor will deal with the need for a shekel with a lower buying power.

Perhaps encourage settlement construction? Send us your suggestions...