Monetary Policy During The Coronavirus Crisis

The Bank of Israel began planning for the coronavirus crisis even before anyone could assess the extent to which the crisis would develop. On February 2, in the entire world outside of China, there was one death as a result of the coronavirus, and just 146 verified cases of the disease. On that day, I gave instructions for the Bank of Israel to establish an interdepartmental team to begin analyzing the implications of the crisis for the Israeli economy. Since then, the pace of developments has been exponential. A great many things that none of us ever imagined have taken place, and the Bank of Israel found itself taking steps that, at the beginning of February, had seemed almost fanciful. Even though the Bank of Israel was very active both in its role as economic advisor to the government and in its supervisory roles, my address today will focus on the central bank’s classic function— monetary policy.