July 6, 2018 / 1:01 PM / a year ago

UPDATE 2-Bank of Israel Governor Flug will not seek second term

(Adds Netanyahu comment, Kahlon spokesman, details)

JERUSALEM, July 6 (Reuters) - Bank of Israel Governor Karnit Flug will not seek a second term after her five-year tenure ends in November, the central bank said in a statement on Friday.

Flug spoke with Prime Minister Benjamin Netanyahu on Thursday and informed him of her decision, the statement said.

“This is not the time for summing up, but I can already say that I will end my tenure with a feeling of great satisfaction, as the Bank of Israel has a marked role in the robust state and the stability displayed by Israel’s economy in recent years, as well as in the analysis and the promotion of discussion regarding the considerable challenges we will face in the coming years,” Flug said in a letter she sent the prime minister.

In the letter she called on Netanyahu to make sure he maintains the central bank’s independence while picking a successor.

Netanyahu, in a one-line statement, thanked Flug for her service and contribution.

Finance Minister Moshe Kahlon said earlier this year he would start looking for candidates for governor and that Flug would be considered, even though the two have had disagreements, mainly over fiscal policy and Kahlon’s preference for lowering taxes.

A spokesman for Kahlon said that Kahlon and Netanyahu had yet to choose a candidate for governor and that there was no set date for selecting one.

Flug replaced previous governor Stanley Fischer in 2013 after serving as Fischer’s deputy, though she had been Netanyahu’s third choice for the position. Two other candidates had backed out.

Flug’s five-year term end on November 12. (Reporting by Ari Rabinovitch and Steven Scheer Editing by Raissa Kasolowsky and Elaine Hardcastle)

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