(Adds finance minister comment)
By Ari Rabinovitch and Steven Scheer
JERUSALEM, Feb 22 (Reuters) - Israeli Prime Minister
Benjamin Netanyahu on Wednesday instructed lawmakers from his
Likud party to stop interfering with and speaking out against
Bank of Israel Governor Amir Yaron and his interest rate
policies.
Netanyahu's rebuke, made public by a party spokesperson,
came after his Foreign Minister Eli Cohen criticized Bank of
Israel interest rates hikes and other lawmakers voiced
disapproval with Yaron over the rate hikes, which in turn led to
a big surge in mortgage rates.
Cohen on Wednesday clarified on Twitter that he supported
central bank independence.
Yaron has taken a hard line in battling inflation, which hit
a new 14-year high of 5.4% in January. The central bank raised
interest rates by half a percentage point at a policy meeting on
Monday to 4.25%, its eighth hike since last April.
The governor has also warned lawmakers who have been pushing
for judicial changes that could weaken the Supreme Court, that
institutional independence was vital for Israel's sovereign
credit rating.
"Prime Minister Netanyahu ordered Knesset members of Likud
to stop interfering and speaking on the issue of the governor,"
said a Likud spokesperson. "The independence of the Bank of
Israel is a central pillar of the economic policy led by the
Prime Minister for two decades and nothing will change that."
Some analysts believe that part of the shekel's recent depreciation versus the dollar stems from political
attacks on the central bank. The shekel has weakened some 10%
the past month, mainly on planned changes to Israel's judiciary.
On Tuesday, Finance Minister Bezalel Smotrich, who is not in
Likud, said: "One must not even hint at hurting the Bank of
Israel's independence because that is key to our economic
stability."
Moshe Gafni, head of one of Netanyahu's ultra-Orthodox
partners and chairman of parliament's finance committee, has
attempted to bring a law that would freeze interest rates on
mortgages after central bank rate hikes. But that bill was
delayed.
(Reporting by Ari Rabinovitch
Editing by Steven Scheer and Bernadette Baum)
Messaging: ari.rabinovitch@thomsonreuters.com@reuters.net))
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.