UPDATE 1-Israeli PM to make announcement on new central bank chief 1045 GMT

Israel's prime minister will make an announcement regarding the appointment of a new Bank of Israel governor at 1:45 p.m. (1045 GMT), the Prime Minister's Office said on Tuesday.

Karnit Flug opted not to stand for a second five-year term when her term, ends next month. If a new governor is not approved before then, her deputy, Nadine Baudot-Trajtenberg, will replace her on an interim basis.

The announcement will be made by Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon.

Mario Blejer, a former head of Argentina's central bank, is considered the favourite to replace Flug, although Israeli economics professors Ben-Zion Zilberfarb and Efraim Sadka and Amir Yaron, a finance professor at the Wharton School of the University of Pennsylvania, have also been interviewed.

Blejer worked in senior positions at the International Monetary Fund and World Bank before a brief stint as president of Argentina's central bank during its economic crisis in 2002. He stepped down after a disagreement with the economy minister.

The candidate would still need government approval.

(With inputs from agencies.)