| 19 June 2024, Wednesday |

Israel cenbank chief, PM Netanyahu to decide on 2nd governor term in October

Bank of Israel Governor Amir Yaron met with Prime Minister Benjamin Netanyahu on Sunday to explore whether Yaron would consider running for a second term, according to the central bank, with both parties agreeing to make a decision after the Jewish high holidays next month.

Yaron, whose five-year term expires in December, also encouraged Netanyahu to seek broad popular support for the government’s plan to revamp Israel’s judiciary in order to preserve the country’s robust economy.

The high holiday season this year is Sept. 16 to Oct. 7.

The central bank declined to comment when asked whether Netanyahu had asked Yaron to stay for a second term. Netanyahu’s office also did not comment.

Yaron, an Israeli-born U.S. finance professor, who was nominated by Netanyahu in 2018, has been critical of the economic impact of a plan by Netanyahu’s government to limit the powers of the Supreme Court.

The issue of whether Yaron will seek, or be reappointed for a second term, has loomed over financial markets for months.

“Whoever is the governor has to continue to be independent and to express the professional opinion in matters concerning the Israeli economy,” Yaron said in an interview with Reuters last week. “And that such a position provides confidence to the markets.”

Yaron said the last five years have been “one of the most challenging” for any Israeli central banker, citing five election cycles, the COVID-19 pandemic, the Ukraine-Russia war, inflation and the government’s plan to overhaul the judiciary that has sparked mass protests and polarised the Israeli public.

Israeli media have also reported that Netanyahu has already reached out to a number of U.S. academics to succeed Yaron.

Policymakers last week held the benchmark interest rate at 4.75% for a second straight time after having raised 10 times from 0.1% since April 2022 to tame inflation. Yaron fought off criticism and potential legislation from lawmakers over steep rate increases that have boosted bank profits and harmed mortgage holders, while banks were slow to pass on higher rates to savings accounts.

  • Reuters