The Bank of Israel announced this evening that it would raise the volume of its purchases of government bonds, and would continue to buying foreign currency.
The central bank says it will buy government bonds to the tune of NIS 200 million daily, and will continue its program of expanding the foreign currency reserves at an average rate of $100 million daily.
Bond purchases will of both shekel-denominated and index-linked bonds. The bank intends to buy NIS 15-20 billion worth of bonds under this, with the amount of daily purchases depending on market conditions. The aim is to ease credit conditions in the market.
The Bank of Israel says it 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 will publish each month on its website the total amount transacted through open market operations in the previous month. In its announcement, the Bank of Israel stressed that all the liquidity provided in these programs would continue to be sterilized.
Published by Globes [online], Israel business news - www.globes.co.il - on March 25, 2009
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