Bank of Israel Governor, Prof. Amir Yaron, has explained the reasons behind the decision to leave the interest rate unchanged in recent interviews with television channels. Despite the pause in interest rate increases, which currently stands at 4.75%, Yaron emphasized that the Bank of Israel has not completely stopped monetary restraint. He stated that if the route does not moderate, the bank will continue raising the interest rate.
Yaron also addressed concerns about the legal reform being discussed in the Knesset, with a demonstration against the legislation taking place outside his office. He stressed the positive connection between the strength and independence of institutions, including the court, and the strength of the economy. He called for changes to be made through agreement rather than unilaterally, warning that political instability could increase the risk premium in Israel and have a negative impact on the economy.
The Bank of Israel projects an increase in growth, but Yaron warned of potential damage to high-tech investments. He also addressed the issue of public deposits in the banking sector, stating that the bank focused on mortgage balances but steps have been taken to raise interest rates on deposits and bank balances. Yaron emphasized the importance of increasing competition in the financial system, noting that it is a process that takes time.
Regarding his own future, Yaron stated that a decision on whether to stay for another term will likely be made around the holidays.