The Bank of Israel building is seen in Jerusalem June 16, 2020.
The shekel fell 2.2% versus the dollar to 3.924 - its lowest since a 2016 - after the announcement, then steadied.
The central bank also said it would provide liquidity through SWAP mechanisms in the market of up to $15 billion.
"The Bank of Israel will continue monitoring developments, tracking all the markets, and acting with the tools available to it as necessary," it said.
Israel's dollar-denominated government bonds also fell sharply in early European trading as investors got their first chance to react to the unprecedented weekend attack.
Persons:
Ronen, Amir Yaron, Steven Scheer, Ari Rabinovitch, Emily Rose, Marc Jones, Jacqueline Wong, Sonali Paul, Andrew Heavens
Organizations:
of, REUTERS, Rights, Bank, Israel, Palestinian, Citi, Bank of Israel, Reuters, Thomson
Locations:
of Israel, Jerusalem, Gaza, Israel, Egypt, Yom, Tel Aviv, London