The Bank of Israel announced Monday that it will purchase NIS 50 billion ($13.4 billion) in government bonds to support the declining economy in the wake of the COVID-19 outbreak.
"In recent weeks, the economic conditions in the Israeli economy have worsened significantly, in view of the spread of the coronavirus and the measures taken to prevent it," the bank said in a statement.
Jobs in the service industry, including hotels, restaurants, bars, retail and tourism, have been most affected by the spread of the disease.
"Economic activity has been seriously disrupted, and volatility in the financial markets has increased," the bank acknowledged, adding that the measure aims to "ease credit conditions in the economy" and "support economic activity and financial stability."
It said: "The additional monetary support is particularly important at a time when many businesses and households are encountering liquidity difficulties due to the serious crisis that is negatively impacting their income."
As some 500,000 Israelis have lost their jobs over the past several weeks due to the coronavirus pandemic, the country's unemployment rate has skyrocketed to 16.5%, the Employment Service reported on Sunday.
Before the virus outbreak, Israel's unemployment rate hovered around 3.6%, one of the lowest in the OECD (Organization for Economic Co-operation and Development).
The government estimates that April will see NIS 2 billion ($523 million) in benefits paid out due to unemployment.