Bank of Israel - Press Releases -  Deputy Governor of the Bank of Israel Andrew Abir Addresses a Conference on the Bank’s Corporate Bond Purchase Program
Central bank: boi | Type: statement | Date: 2020-07-28

“We are in a once in a hundred
years crisis, and therefore we are putting into operation a range of policy
tools that are available to us, including precedent-setting and creative tools.
In addition, we are acting in an immediate and determined manner to implement the
policy decisions, as one of the components in the effectiveness of a policy
tool is the principle of “reaching the market” from the moment the policy
decision is reached (the TTM principle).
We carried out comprehensive
staff work and held long discussions in the Monetary Committee before
announcing the steps at the interest rate decision on July 6, 2020, including
the corporate bond purchase program.
We decided on the program within
the framework of the activities we are carrying out in order to ease the terms
of credit in the economy. As such, the program is integrated with our other
steps—reducing the interest rate, purchasing government bonds, the plan to
increase the supply of credit to small businesses, which we decided to renew in
view of the increased severity of the crisis, and in addition the corporate
bond purchase program. These need to be seen as a range of steps, all of which
are aimed at the same overall target.
One proof from the field of the
effectiveness of the program is issuances of billions of shekels, particularly
by nonfinancial companies, that were initiated in the days after our
announcement, and essentially enabled companies to raise funds and thus
continue keeping the economy’s wheels moving.
We are constantly following
market developments and economic activity and will adopt the policy measures in
the areas within our responsibility, to the extent they will be necessary in
the future.”​