Monetary Committee decision: The Bank of Israel will increase the government-bond purchase program in the secondary market by NIS 35 billion

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.​