With six months until the end of Prof. Amir Yaron's term as Bank of Israel Governor, uncertainty over his replacement could further damage the economy.
Prof. Amir Yaron also discusses the banks' response to interest rates, bank profits, and the housing crisis.
Foreign Minister Eli Cohen requested that the Finance Ministry work to stop the increase in Israel's interest rates.
Prof. Karnit Flug said that the reforms could lead to a weaker economy, lower incomes and a reduced standard of living.
A further increase in the interest rate may reduce the effects of inflation, but it will have a negative impact on the recipients of loans and mortgages.
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