The Israeli government will extend its aid program for exporters for another year to help them cope with the weakness of the greenback against the shekel, which is hurting the industry.

"It is our duty to act in order to help exporters to survive this period and assist and strengthen their ability to compete with global companies," said Industry, Trade and Labor Minister Binyamin Ben-Eliezer. "We need to remember that Israeli exporters are struggling with the global economic crisis and the temporary appreciation of the shekel against the shekel. This situation is dangerous for the Israeli economy and is poised to trigger a wave of layoffs."

The Industry, Trade and Labor Ministry together with the Finance Ministry announced at the end of last week that it will extend the exporters aid program, which was set to expire at the end of the year. The program will be extended by another year until the end of 2010 and conditions will be improved. Under the framework of the aid program, companies with exports of up to $10 million in the previous year of application are eligible for receiving advice on hedging against exchange rate fluctuations, changes in prices of commodities and raw materials, interest rates, and other risks. Over the next year, the government will subsidize 75% of the cost of the consulting services compared with 50% today.

Following a meeting early last week with Elisha Yanai, President & CEO of Motorola Israel, which discussed how the falling shekel-dollar exchange rate was hurting exporters, Ben-Eliezer urged Finance Minister Yuval Steinitz to convene an urgent meeting on the issue as soon as possible.

"The ministry under my leadership has implemented a number of effective tools to help exporters deal with the weakness of the greenback. Unfortunately though, it is not in the ministry's power to use monetary tools in order to have an impact on the exchange rate itself," said Ben-Eliezer. "Therefore I am calling for an urgent meeting in order to examine joints effort to help Israeli exporters survive, and thereby provide jobs for many families.

Over the course of last week, the shekel-dollar exchange rate slid to below NIS 3.70, before rising 1% to a representative rate of 3.77 on Thursday after the Bank of Israel announced that it was leaving October interest rates unchanged at 0.75%.