Russian Central Bankers In Israel To Study Exchange Rate System
JERUSALEM (AP) _ A week after introducing a trading band to halt the collapse of the ruble, Russian central bankers arrived in Israel Wednesday to study a similar system that has succeeded in stabilizing the shekel.
The Russian delegation, led by central bank chairwoman Tatiana Paramonova, was meeting with Bank of Israel director Yaacov Frenkel and other leading economists during a two-day stay, the Bank of Israel said in a statement.
Russia’s central bank announced last week that it would defend the besieged ruble within a band of 4,300 to 4,900 to the dollar. The band is to be readjusted in three months.
Pressured by ongoing hyperinflation, the ruble has fallen from around 100 to the dollar three years ago, when free-market reforms began, to more than 5,000 versus the U.S. currency in April.
Israel introduced a band system for foreign exchange as part of a stabilization package that ended years of hyperinflation in the mid-1980s.
The Israeli band is diagonal, constantly rising at a predetermined annual pace _ this year six percent. The devaluation is aimed at bridging the gap between price rises in Israel _ a projected eight percent this year _ and the somewhat lower inflation of Israel’s Western trading partners.
The shekel has remained stable at around three to the dollar for almost two years.