Wires

Israel to bolster businesses as market plummets for second day

Ari Rabinovitch and Tova Cohen

JERUSALEM, March 9 (Reuters) - Israel rolled out its first measures to assist local businesses as the main Tel Aviv Stock Exchange indexes, rattled by the global coronavirus outbreak, fell sharply on Monday for the second day running.

The Finance Ministry said it was opening a 4 billion shekel ($1.1 billion) credit line for banks to lend money to small and medium-sized businesses facing a cash crisis with a high-level government guarantee.

"No doubt the fact that the global coronavirus crisis is meeting Israel with a strong economy, low unemployment, a high credit rating and a dropping debt-to-GDP ratio will help us weather the crisis with minimal damage to the economy," Finance Minister Moshe Kahlon said in a statement.

Israel has taken some of the most extreme precautions to prevent a local coronavirus outbreak, forcing travellers from many countries in Asia and Europe into home isolation. This has made travel and trade difficult, with tourism expected to take a big hit.

The government is considering expanding the quarantine measures to all other countries, which would effectively cut Israel off from the rest of the world. A decision is expected later on Monday.

The uncertainty put off investors and the blue chip Tel Aviv and the broader TA-125 were down 5%, similar to drops a day earlier. The shekel, which peaked against the dollar in mid-February at 3.416, was trading at about 3.5 at midday.

Israeli Prime Minister Benjamin Netanyahu, who refers to the crisis as a global pandemic, made clear that public health is paramount and that Israel will continue taking stern measures if necessary, but he emphasised that economic needs will be taken into account.

Netanyahu organised a video conference with leaders of Italy, Austria, Hungary, Bulgaria, Romania, Croatia and Cyprus to discuss cooperation during the crisis.

"We each have our own experiences. We see what works, what doesn't work and we can trade with each other," he said during the conference call, which was open to the media.

Israel's central bank has said it does not expect a major economic impact if the virus is halted in the coming months, but that it is ready to use monetary policy tools "whenever necessary" should conditions worsen. ($1 = 3.4994 shekels) (Additional reporting by Jeffrey Heller, editing by Ed Osmond)