Jerusalem, 15 November 1999

Bank of Israel Governor Frenkel Resigns

(Communicated by Bank of Israel Spokesman and Prime Minister’s Media Adviser)

Bank of Israel Governor Jacob Frenkel announced to Prime Minister Ehud Barak his decision to resign from his post as of 2 January, 2000. The Governor was appointed as Governor in August 1991 and was reappointed in 1996, serving nine years in his post.

In a letter sent to the Prime Minister several months ago, Professor Frenkel noted that the policy objectives he defined upon entering his job have been achieved in full: Inflation has been reduced to its lowest level in three decades and today approaches the rate prevailing in developed countries; the liberalization of the foreign currency market has been highly successful and the exchange-rate regime has become flexible; Israel’s money and capital markets have become an integral part of international markets; the Israeli banking system is modern and robust and the Israeli economy has become a preferred market for foreign investors. In particular, while absorbing large-scale immigration, the Israeli economy has managed to integrate into the global economy with the utmost, as is appropriate in the era of globalization. Now, the Israeli economy is ready to resume sustained growth, as recently published economic data indicates.

The Governor pointed out to the Prime Minister that for some time he has been considering his decision to end his public duties and continuing other activities. However, because the general elections had been brought forward, his concern for and responsibility for the stability of financial markets led him to defer the implementation of his personal plans the cloud of political uncertainty had dispersed and until the economic strategy has been put in place.

The Governor also noted that during his term of office, he had been able to serve the State of Israel at a time of dramatic changes, including the large-scale absorption of immigrants, the peace process and the Israel’s integration into the global economy. The Governor added that during his years in office, he has had the privilege of working with five prime ministers and is deeply grateful for the opportunity granted to him to make his own humble contribution to the attainment of Israel’s economic goals. He wishes success to the Prime Minister and government every success in continuing on this path and in aspiring towards the full implementing of the economic policies that would benefit the country as a whole.

The Prime Minister expressed his great appreciation and gratitude for the Governor’s contribution in reducing inflation, achieving economic stability, improving Israel’s financial standing and successfully integrating the Israeli economy with the world. Considering the Governor’s consistency, determination, firmness and professionalism in his endeavors to achieve the country’s economic goals, chief among them being the attainment of the conditions for sustainable growth.

The Prime Minister said that the Governor’s policies during his terms of office have firmly established the status of the Bank of Israel and paved the road – on which it will be necessary to persist – for the Israeli economy to successfully meet the challenges of the 21st century.

The Prime Minister praised the cooperation evident between himself, the Governor and the Finance Minister under the current administration and during the discussions on the budget and inflation targets for the coming years. He concluded by stating that he would appoint a new governor as soon as possible.