Further to the
Monetary Committee decision of March 23, 2020 to launch an NIS 50 billion program to
purchase government bonds on the secondary market, with the goal of easing the
credit terms in the economy and supporting economic activity and financial
stability, the Monetary Committee decided today to increase the purchase
program by NIS 35 billion.
The
Bank of Israel interest rate is at a very low level and eases financing needs in the economy. The bond
purchases enable the Bank of Israel to impact on the bond yields in the market
all along the nominal and CPI-indexed curve, and thus reduce the credit costs
over longer terms for companies and households, as a complementary tool to the
short term interest rate policy.
In
view of the crisis continuing to impact Israel and the world, the Committee
decided to increase the government-bond purchase program by NIS 35 billion and
thus continue to support financing ability in the economy, in view of the
strengthening of the coronavirus crisis and its economic effects.
The
Monetary Committee will continue to operate the tools at its disposal to the
extent necessary in order to implement the extent of monetary accommodation
required, and to ensure the continued orderly activity of financial markets in
Israel.
The
Bank publishes a monthly
report on the programs it operates in the financial markets in view of the
coronavirus crisis. Through the end of September, government-bond purchases
totaled NIS 33.6 billion.