Prime Minister Benjamin Netanyahu and Minister of Finance Bezalel Smotrich have agreed to extend the tenure of Bank of Israel Governor Prof. Amir Yaron to a second five year term. The decision will be brought to the cabinet for approval at its next meeting. Yaron himself has not yet responded on whether he accepts the extension.
Smotrich announced yesterday that he backs extending Yaron's term as Governor of the Bank of Israel. Smotrich and Yaron have worked closely since the start of the war and the Minister of Finance's aids say that the extension is designed to calm the markets and provide stability for the economy.
The decision has been reached after months of speculation on the matter and just under a month after Yaron had been due to complete his first five-year term. Yaron has been a popular figure on the market which sees him as responsible and a stabilizing influence on the market and has been calling for him to be offered a second term for some months. Nevertheless, before the war Netanyahu refused to commit to a second term for Yaron. However, several days after the start of the war it was announced that Yaron would remain in the post at least until the end of the war.
Yaron, who became Bank of Israel Governor in 2018, has undergone many tumultuous events during his first term. These include the global Covid pandemic, the rise in inflation and the need to raise interest rates and the government's planned judicial reform, on which the senior figures at the Bank of Israel felt the legislation should only be passed with a broad consensus. Yaron successfully navigated safely through these events, protecting the strength of the economy, even as interest rates rose sharply.
Now, Yaron is expected to have another five years as Governor of the Bank of Israel at a time when Israel is in a war that will affect the economy sharply, including a decline in GDP and a general slowdown. In addition, inflation has not yet fallen the bank's target and additional economic upheavals, both domestic and global, are likely to continue to affect the economic picture.
Published by Globes, Israel business news - en.globes.co.il - on November 20, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.