Remarks by Bank of Israel Governor Prof. Amir Yaron in a joint announcement with the Prime Minister, the Minister of Finance, and the Minister of Economy regarding economic preparedness for the coronavirus
The Bank of Israel under my leadership is determined to take all steps necessary to protect the economy from the coronavirus.
The overall objective of these measures is to support continued economic activity and to create a safety net for businesses and budgetary sources for the healthcare system and others, so that they will be able to successfully come out of this period and continue to act at full strength.
The Prime Minister, the Minister of Finance, and I are working in full cooperation to advance and ensure continued assistance and economic activity.
The Ministry of Finance in conjunction with the Bank of Bank of Israel will assist, partly through the launch of a designated fund for small and medium businesses, which will help them deal with the situation in the interim period.
The Israeli economy is encountering the virus at a very good starting point. The strong economic data, including the low debt to GDP ratio and unemployment rate, the current account surplus, the high level of foreign exchange reserves, and the robust financial system, increase the economy’s resilience in the face of developments. We therefore believe that as soon as the corona crisis is over, the economy will return to the strong growth we have come to know in recent years.
The banking system in Israel is also strong and stable, with a high-quality distributed credit portfolio, and is prepared in terms of capital and liquidity for various stress scenarios.
This week, I invited the CEOs of all the banks to meet with me so that we could closely discuss their preparedness for the new situation. I am pleased to say that the banking system enlisted in a praiseworthy manner to deal with the economic implications of the crisis and to support business activity through means such as loans at lower interest rates, pushing off mortgage payments, and more.
The Bank of Israel is monitoring developments in the stock markets in Israel and abroad minute by minute. It is notable that despite the declines in the recent period, the markets in Israel are functioning well in terms of the liquidity necessary for trading. No one should have any doubt: If there are any signs of worsening, or of market failure, in the financial markets, the Bank of Israel has the tools to return liquidity to the markets.
Monetary policy remains accommodative, thereby supporting economic activity, and the Bank of Israel has a variety of tools to continue supporting economic and financial activity in the economy.
Thank you and Happy Purim.