The Bank of Israel will increase the amount of government bonds to be purchased through Open Market Operations and continue to purchase foreign currency

15.02.2009
 
The Bank of Israel will increase the amount of government bonds to be purchased through Open Market Operations and continue to purchase foreign currency
The Bank of Israel will increase the amount of government bonds purchased through open market operations to a daily average of NIS200 million. Furthermore, the Bank is extending the program to increase the level of foreign exchange reserves and will continue to purchase an average of US$100 million per day.
 
Operations in the Government Bond market
As previously announced, the Bank of Israel has been conducting since 17/2/09 open market operations in the secondary market with government debt of different types and maturities.
As of tomorrow the Bank of Israel will increase the amounts purchased through this tool to a daily average of NIS200 million of government bonds. The purchases will be conducted in the nominal and inflation linked government bond markets. The Bank intends to purchase between NIS15-20 billion through this program. The daily amounts purchased in the different bond series will depend on the prevailing market conditions. The aim of this program is to foster conditions that will support an easing of credit conditions in the economy.
The Bank of Israel expects this step to enhance the effectiveness of the Bank's monetary policy and the resilience of the domestic economy in the face of the world economic crisis.
The Bank of Israel will publish on its Website, on a monthly basis, the total amount transacted through open market operations in the previous month.
The Bank of Israel will monitor the use of this instrument and make adjustments if and when they are required.
The Bank of Israel will continue to purchase foreign currency
The Bank of Israel announces that against the background of the world economic situation and in the context of its overall policy, the Bank will continue to purchase on average US$100 million per day, as part of its program to increase the level of the foreign exchange reserves.
The Bank will continue to review the program from time to time and make adjustments if and when they are required.
The Bank of Israel emphasizes that all the liquidity provided in these programs will continue to be sterilized.
These programs contribute to strengthening the ability of the economy to cope with the impact of the global economic crisis, which impacts mainly the demand for exports and the resulting slowdown in economic activity. Furthermore these programs support the resilience of the financial system and price stability.a