A man enters the Tel Aviv Stock Exchange, Jan. 29, 2017. Photo: Reuters / Baz Ratner.

Israel’s central bank added hundreds of millions of dollars of liquidity to the foreign exchange market on Monday after the shekel slid against the dollar amid huge stock market losses in the wake of the global coronavirus outbreak.

The shekel was down 2.1 percent against the dollar in afternoon trading at 3.74, after matching a December 2018 low of 3.7611 earlier in the session that had brought the shekel’s loss in March to more than 8 percent.

Dealers had said local pension funds and other institutional investors were seeking dollars amid the steep stock market sell-off and were waiting to see if the central bank would act.

Around midday, the Bank of Israel said it had responded with an auction of one-week dollar-shekel swaps with local foreign banks, offering dollars in return for shekels.

“Because of dollar liquidity problems in the currency markets both around world and in Israel, we started supplying short-term liquidity to return the markets to being fully functional,” Bank of Israel Deputy Governor Andrew Abir told Reuters, citing margin calls for share exposures overseas.

He would not give an exact figure for the amount of dollar liquidity added through dollar-shekel swaps since the transaction was not over, but said it was in the “hundreds of millions of dollars.”

Tel Aviv share indices were down another 7 percent on Monday, while government bond prices halved earlier losses and were down around 0.4 percent.

The central bank on Sunday said it would start buying government bonds for the first time since 2009 after long-term bond yields more than doubled this month. Abir said the bank had bought more than 400 million shekels ($107 million) on Sunday and “considerably” more on Monday.

He said he hoped the bond buying program would be short-lived.

“We don’t expect to be in the (bond) market every day,” Abir said. “If there are specific days when there is some form of stress in the market, then we will be there to help the market out.”

“Our job at the central bank is to ensure that the various actors in the markets — banks, financial institutions and corporates — will have access to functioning markets and be able to carry out whatever transactions they need to do in a reasonable manner,” he said.

Another goal was to keep credit costs to businesses and households from rising, he said.