The absence of these basic instruments creates unwelcome distortions in the market, whether through credit pricing that is too high, or through the allocation of financing from the outset. This may lead to an equilibrium where the quantity of credit declines, difficulties emerge for the real sector, and the rate at which the economy can grow is impaired.
The Bank of Israel is acting to develop and institutionalize the Telbor interest rates as benchmarks of the real interest rate. These rates make it possible to use not only the fixed nominal or daily variable interest rates, but also a rate that varies over longer and predefined periods of time.