The Governor of New Zealand’s Reserve Bank, Adrian Orr, has unexpectedly resigned two years into his second five-year term. No reason for his departure was given.
In a statement, Orr said the bank had built its capability and credibility to face what he called an “increasingly complex and challenging global environment” and that he was leaving with inflation on target and the economy in a recovery after a “long period of COVID-related disruption.”
Under his stewardship interest rates rose to a peak of 5.5 percent in response to inflation following the pandemic, before falling to 3.75 percent in February.
“The financial system remains sound. However, there is much work left to do on the major multi-year strategies RBNZ is following. Ongoing focus and funding will be critical to these projects’ success,” Orr said.
Finance Minister Nicola Willis said Deputy Governor Christian Hawkesby would be acting governor until March 31.
Then from April 1—on the advice of the RBNZ Board—she will appoint a temporary governor for up to six months.
Orr was reappointed in March 2023 and was expected to remain in the role until 2028. However, in a surprise move this afternoon he announced he was stepping aside after seven years in the role, having first been given the job in 2018.
His reappointment under outgoing Labour Finance Minister Grant Robertson on the eve of a general election was criticised by three senior members of what became the Coalition government of National, ACT, and NZ First.
Willis, who was the National Party’s finance spokesperson at the time, had written to Robertson saying her party did not support Orr’s reappointment. She also called for the bank’s performance to be independently reviewed.
“We think questions should be asked and answered,” Willis said previously. “This is about accountability for a situation that is very difficult for many New Zealanders today.
Criticised by the Prime Minister
Christopher Luxon, who is now the prime minister, said Willis had “expressed [it], I thought, incredibly well.”“We actually think there were monetary policy decisions, government spending decisions that have contributed to an environment where there has been massive asset price inflation, and banks have made large profits.”
ACT Party leader David Seymour—who is now a senior minister and will soon become deputy prime minister as part of a power-sharing agreement with NZ First—was also opposed. He said Orr had overseen a term of “poor leadership, poor focus and poor outcomes,” and accused him of failing to accept responsibility for the bank’s failures.
“When appearing in front of the Finance and Expenditure Committee ... he refused to accept the Reserve Bank has gotten anything wrong, despite massively overstimulating the economy, causing consumer price inflation, asset price inflation, inequality, and now higher interest rates,” Seymour said at the time.
