Amid a wave of government moves seeking to curb the wave of price hikes in Israel, Finance Minister Avigdor Lieberman called on US and EU regulators to ease the bureaucracy involved in importing goods into Israel so as to increase competition.

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Channel 12 News reported Tuesday that, in a highly unusual move, Lieberman sent letters to Chair of the US Federal Trade Commission Lina M. Khan and Executive Vice President of the European Commission Margrethe Vestager, in charge of competition policy in the 27-nation bloc, asking them to tackle what he described as "unfair and anti-competitive practices by producers importing goods into Israel."

The government has been employing various measures to combat the rising cost of living in Israel, where the consumer goods market – especially foods – is controlled by a handful of companies – and the convoluted regulation by the US and EU is preventing Israel from widely opening the marker to competition

Lieberman, whose ministry has relaxed import regulations as part of the effort to allow new players into the consumer goods sector, argued that the current American and European regulations contributed to the high costs of goods, and prevent Israel from decentralizing the sector.

According to Channel 12 News, Lieberman asked Khan and Vestager to allow producers to set prices as they see fit, which would allow them to enter the market and compete with other importers.

He also urged the three's antitrust authorities to cooperate more closely and "share information in order to protect consumers from unfair pricing practices."

Focusing specifically on parallel imports – by which retailers and new importers buy products directly from the original producers rather than from the main importer – Lieberman said the practice imposed "undue hurdles on bringing consumer products to the Israeli market" and asserted that they have "contributed to restrictions on competition in the Israeli market," something that "places Israeli consumers at a disadvantage."

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Chinese tech giant Alibaba is shutting down its research and development center in Tel Aviv, Israeli media reported last week.

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According to financial daily Globes, the center's employees received an email from management informing them of the move.

According to TheMarker, the company plans to terminate the employment of the center's 40 employees.

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Inflation in Israel over the past fiscal year was 4% - the highest since 2011, the Central Bureau of Statistics announced Sunday.

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Meeting analysts' expectations, the Consumer Price Index rose 0.8% in April, but the figure did not meet the government's target range of 1-3%.

The CPI was driven up by price hikes in fresh produce (5.5%), clothing (2.8%), transportation (2.8.%), and entertainment (1.5%)

Home prices rose by 16.3% rise in twelve months, while the Construction Inputs Index rose by 6.8% over the past fiscal year.

According to the CBS, the price hike was highest in central Israel – 18.5% on a year-on-year average – followed by Jerusalem (16.7%), Tel Aviv (16%), Haifa (14.9%), and Israel (13.8%), and southern Israel (12.3%). The prices of new homes rose by 20.7% overall in the past 12 months.

Last week, the Finance Ministry pegged Israel's fiscal deficit for the 12 months that ended in April at 0.6% of GDP.

Since the onset of 2022, Israel has recorded a fiscal surplus of NIS 31.4 billion, according to financial daily Globes.

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Morgan Stanley Capital International on Monday left Israel out of the European index and retained its Middle East classification, crushing hopes for a boost in the Israeli capital market.

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Israel's Sunday-to-Thursday trading schedule was apparently the primary factor in MSCI's decision, as Europe's market schedule runs Monday to Friday.

The investment research firm said it would "continue to engage market participants on the topic" after declining to add Israel to the European index, local media reported.

According to MSCI, a global investor poll that launched in December 2021 revealed strong divisions regarding the appropriate regional classification of the MSCI Israel Index.

"The topic continues to pose a challenging question across global market participants," the firm stated.

"While many respondents to the recent consultation suggested that the MSCI Israel Index should be regionally reclassified to Europe, a significant portion of other respondents presented strong reasons against it."

Supporters of Israel's regional reclassification argued that the nation's economic indicators aligned more with European states, The Times reported.

They further contended that keeping Israel's index within the Middle East classification could lead to investors being less exposed to Israeli companies.

Those against the move said the differences in trade schedules significantly hindered the relationship with European markets, and maintained that geographical proximity is the primary driver in determining regional grouping.

According to some estimates, reclassifying the Israel Index into the European market could have added at least $1 billion in investments into Israeli equities.

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The Israeli shekel weakened on Tuesday as investors sought safe-haven currencies, particularly against the US dollar, as the Russian-Ukraine crisis escalated into a full-blown conflict, financial daily Globes reported.

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"The shekel is weakening against the dollar after reports that Russian troops have moved into eastern Ukraine," the report stated.

"In afternoon interbank trading, the shekel exchange rate is up 0.36% against the dollar at NIS 3.222/$ and up 0.32% against the euro at NIS 3.654/€," it added.

On Monday, the Bank of Israel set the representative shekel-dollar rate up 0.532% from Friday, at NIS 3.210/$, and the representative shekel-euro rate was set 0.317% higher at NIS 3.643/€.

The trend marks a departure from last week, when the shekel strengthened against the dollar and euro after initial Russian claims that it would pull back troops from the Ukrainian borders, raising false hopes of a de-escalation.

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Also on Monday, the Bank of Israel said it would "begin a gradual process of raising interest rates in the coming weeks," said the report.

"The next interest rate announcement is on April 11, and analysts expect the rate will rise then from 0.1% to 0.25%, assuming that the US Federal Reserve raises interest rates next month," it announced.

JNS.org contributed to this report.

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The 13-story building includes 13,000 square meters (140,000 sq. feet) of office space in the heart of Tel Aviv's city center, an area that is in high demand by high-tech companies.

Construction of Leumi's HQ finished in 2003 at an investment of NIS 127 million ($40 million). The bank's HQ includes the adjacent Beit Mani building, a conservation building built between 1910 and 1915.

According to financial daily Globes, Leumi has sold much of its real estate assets in Tel Aviv in recent years. It is expected to complete its planned move to Lod by 2024.

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Major Israeli food importers and producers Osem, Diplomat, and Leiman Schlussel announced over the weekend that there are postponing planned price hikes, which evoked government criticism and calls on social media for consumer boycotts.

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Finance Minister Avigdor Liberman and Economy Minister Orna Barbivay said last week that the planned price hike was "outrageous" especially at a time of economic hardship brought on by the coronavirus pandemic.

All three compamies said they were pushing the move until after Passover.

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Finance Minister Avigdor Lieberman and Economic Minister Orna Barbivay on Sunday admonished food producers and importers over the recent series of price hikes, calling the move "callous" and "cynical" at a time when Israelis are dealing with a global pandemic.

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Both called on producers and importers of foods and other essential products not to raise prices.

Citing global cost hikes and overhead losses, a series of major companies have announced price increases on their products in recent weeks, affecting everyday goods that can be found in nearly every home. They include detergent giant Sano, Osem-Nestle, Leiman Schlissl, the Strauss Group, Diplomat Group, Ristretto, and Shestowitz.

"We will not hesitate to take the steps necessary to ensure a competitive and fair economy," Lieberman said. "I expect companies to reconsider and avoid cynical price increases that will harm the Israeli public," he added.

In a joint statement, Lieberman and Barbivay wrote that the strong currency combined with low inflation and wage increases "meant that products and raw materials brought by your company to Israeli were cheaper for you, without you reducing your prices for the Israeli consumer accordingly and [these prices] were among the highest in the world for these products."

The Competition Authority says that "in recent weeks, data requirements have been issued examining whether the price increases were made in accordance with the provisions of the Food Law." This, following the Competition Authority's investigation that was opened in early November for violating the Competition Law - then the CEOs of the companies Diplomat, Strauss, Rami Levy, Victory and others were invited to the Authority's offices.

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The cryptocurrency market took a massive hit on Monday as major digital coins crashed, wiping $130 billion off its value in a span of 24 hours.

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Bitcoin plunged almost 9% to its lowest in six months. The largest cryptocurrency was trading at $33,058 –  its lowest since July 23, taking losses from its all-time high of $69,000 hit in November. Ether dropped by 7% to $2,239.08, its lowest level since late July, while Binance Coin was down 12%, according to Coin Metrics.

The top cryptocurrency and Ether are now 40% and 51% from their respective all-time highs, according to CNBC.

The movements in cryptocurrencies follow similar trends in the stock market, as major platers' shares have continued to fall since the beginning of the year. Last week was Wall Street's worst since March 2020.

CNBC noted that investors have been "selling risk assets like technology stocks as they prepare for tighter monetary policy" by the US Federal Reserve, including the potential impact of further regulation on the cryptocurrency market.

Investors are also grappling with rising inflation, something Bitcoin proponents have long suggested the digital coin is a hedge against, but that theory has not held. "There are more short-term investors in the crypto market valuing bitcoin like a tech stock than ever before. Analysts say there's concern a more hawkish Fed could take the wind out of the crypto market's sails," the report said.

Current trading data shows that over $1 trillion has been wiped from the aggregate crypto market's value since November.

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Over the past year, half of the 100 Israeli companies traded on Wall Street fell more than 50% from their peak, and only 20% saw single-digit falls, financial daily Globes reported over the weekend.

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The report cited Oppenheimer Israel senior equity analyst Sergey Vastchenok as saying that investors are losing the appetites they had for tech stocks at the start of the COVID pandemic, as the Nasdaq Index is down 9.7% from its peak.

"There is certainly a change in investors' tastes," Vastchenok said. "The process began with remarks by [Federal Reserve] chair Jerome Powell about plans to raise the interest rate."

Vastchenok described how the expectations of investors shifted for a swifter recovery of the economy from the COVID crisis: "Despite the wave of cases in Israel and around the world, the market is behaving as if COVID is already over in all investment options," he said, adding that people are "learning to live with COVID."

"We see accelerated growth and inflation and investors are seeking options in the old economy," he continued, Globes reported.

The analyst explained how during COVID, investors sought options with "COVID immunity" that succeeded in growing despite difficult "macroeconomic conditions."

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However, the stocks that most identified with COVID then are now falling the most.

Among such Israeli stocks in recent descent are web development firm Wix, online marketplace Fiverr, and software company LivePerson.

While they continue to grow as businesses, investors don't care, returning to stocks that were popular pre-COVID as some consider the virus to be entering into its endemic phase.

i24NEWS contributed to this report.

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