18 March 2008

By Contrast...

Israel Stands Firm in Worldwide Financial Earthquake

(IsraelNN.com) The strong Israeli economy and a Bank of Israel forecast of a reasonable inflation rate have made Israel one of the best-situated countries to withstand the financial earthquake that has shaken the United States and reverberated around the world, according to several analysts. The Tel Aviv stock market sank sharply Monday in anticipation of a Wall Street crash, which did not materialize, and analysts said it likely will spring back.

The shekel-dollar rate slipped below 3.40 briefly on Monday and ended slightly above the same level. Lehman Brothers' Tolga Ediz said that Israel appears to be a safer investment than those in other countries because of the higher interest rate than in the United States and the previous performance of the local stock market. "In real trade-weighted terms, the shekel is still about four per cent lower than its historical ten-year average, something that cannot be said about the majority of currencies in emerging markets," he added.