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The Ministry of Finance and the governor of the Bank of Israel are exchanging blame for the rapid shekel devaluation. After Governor David Klein yesterday said that the failure to approve the budget is what is causing the dollar to fluctuate so much, Finance Ministry director-general Ohad Marani said the foreign currency market would not get as shaken up had the interest rate not been so crudely slashed in one fell swoop.

Marani further stated that the same interest level could have been achieved through slower reduction of interest rates over time. In the same breath, Marani added the dollar is traded at a reasonable level, and that clearly the failure to pass the budget is what is causing the jittery trade, and that it is time to pass the budget as is. Marani believes the market is in a recession and the public should not become an accomplice to price hiking.

Finance Minister Silvan Shalom said that for a few years now the dollar has been trading below its real level, hence its rise is merely a correction. He thinks the dollar's rise will help exporters, mortgage payers and the creation of new jobs in the market. Shalom was hopeful the budget will be passed as is as soon as possible, and added the Ministry of Finance was doing its best not to impose new taxes on the market.

Shalom also said that on Sunday the Rabinovich Taxation Committee will submit its real estate taxation recommendations for cabinet approval, and estimated they will be accepted by a large majority. The minister said the treasury will soon announce the members of the committee that will discuss possible tax reform.

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