Israel's cabinet approves Amir Yaron as central bank chief

JERUSALEM (Reuters) - Amir Yaron, a professor at the Wharton School of the University of Pennsylvania, looks set to be the next governor of Israel's central bank after the Israeli cabinet approved his nomination on Sunday.

The final decision lies with Israeli President Reuven Rivlin, who is widely expected to back the nomination of Israeli-born Yaron.

The economist is Prime Minister Benjamin Netanyahu's choice for the post and would succeed Karnit Flug, whose five-year term ended last week.

Yaron has lived in the United States for two decades. He cleared a special vetting panel earlier in November and would be sworn in on Dec. 24, the Bank of Israel said in a separate statement.

Deputy governor Nadine Baudot-Trajtenberg is currently acting governor and will head the monetary policy committee meeting on interest rates on Nov. 26.

"I am aware of the heavy responsibility placed on my shoulders, and I will do all in my power to fortify the strength and continued growth of the Israeli economy," Yaron, 54, said in a statement.

"I am excited to return to Israel after the years I spent in the United States pursuing my academic work, and I view this position as the pinnacle of my professional career."

With inflation now inside the government's target of 1 to 3 percent, central bank policymakers are forecast to start raising interest rates in the first quarter of 2019.

(Reporting by Steven Scheer; Editing by Tova Cohen and Susan Fenton)