By Steven Scheer
JERUSALEM (Reuters) -Israel’s cabinet approved the appointment of Ori Heffetz to the Bank of Israel’s monetary policy committee, the central bank said on Sunday in a move that will bring the panel back to its full six members for the first time in two and a half years.
Heffetz’s tenure is effective immediately but he will not vote at Monday’s interest rates decision since he was not present in all the rounds of discussions and monetary analysis in recent weeks. His first vote will be at the subsequent meeting on July 7.
He specialises in macroeconomics and monetary policy, economic policy, and empirical, experimental and behavioural economics.
Heffetz has served as an economics professor at the Hebrew University since 2022 as well as a professor at the School of Business Administration at Cornell University since 2024.
Bank of Israel governor Amir Yaron said that Heffetz “has rich and relevant professional experience and I am sure he will contribute greatly to the work of the committee.”
By law, Israel’s policy setting committee is meant to have six members – three from the Bank of Israel including the governor and deputy governor, and three from the public.
In January 2023, Moshe Hazan, a Tel Aviv University economics professor, quit the MPC to fight the government’s plan to overhaul the judiciary – which has since been shelved – and no one had been chosen to replace Hazan until Heffetz was nominated by a search committee earlier this year.
Current voting members from the Bank of Israel include Yaron, his deputy Andrew Abir and research chief Adi Brender, along with non-central bank economists Naomi Feldman and Zvi Hercowitz.
At the outset of Israel’s war with Hamas, the central bank reduced its benchmark interest rate by 25 basis points in January 2023 to 4.5%, having sharply raised it previously to battle inflation.
It has kept the rate unchanged since then due to inflationary pressures stemming from the now 19-month old conflict, including labour and supply constraints.
Inflation rose to 3.6% in April, well above the government’s 1-3% annual target rate. Economic growth has been weak due to the war – only 0.9% in 2024 but increasing to an annualised 3.4% in the first quarter of this year.
(Reporting by Steven Scheer; editing by Clelia Oziel)
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