Adrian Orr’s resignation has no effect on near-term policy but raises longer-term uncertainty. Further regulatory easing is on the table, with restrictive capital rules under potential government review. Regulatory policy shifts could impact rate differentials and capital flows via banking capital requirements. The New Zealand rates curve may steepen as policy shifts emerge, Standard Chartered’s economists Bader Al Sarraf and Nicholas Chia report.
Change of guard
“Adrian Orr’s resignation as governor of the Reserve Bank of New Zealand (RBNZ) three years before the end of his second term comes at a time when monetary policy, financial regulation and macroeconomic conditions remain key concerns. Deputy Governor Christian Hawkesby will be acting governor until 31 March, after which a temporary replacement will serve for up to six months.”
“Since 1988, all RBNZ governors have been appointed externally, suggesting that an outsider may again be favoured. However, the names being flagged in local media include both internal and external candidates.”
“Orr’s successor could influence New Zealand’s monetary policy trajectory, despite the RBNZ’s tradition of consensus-driven decision-making. A more hawkish governor could advocate for a slower pace of rate cuts, prioritising financial stability, while a dovish appointment could push for more aggressive easing to support growth. In our view, the next governor is likely to be a pragmatist, balancing policy flexibility with financial stability rather than steering the central bank in a sharply different direction.”
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