Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr shocked financial markets by suddenly resigning on Thursday to end a controversial term marked by tensions with the New Zealand Government.
The RBNZ said Deputy Governor Christian Hawkesby would be Acting Governor until 31 March 2025 during which time Orr would be on leave.
“From 1 April the Minister of Finance, on recommendation from the RBNZ Board, will appoint a temporary Governor for a period of up to six months. Mr Hawkesby will also chair the Monetary Policy Committee,” New Zealand’s central bank said in a statement.
Orr’s resignation finished a seven-year term that became challenging as the country slumped to its worst recession 1991 as high interest rates wreaked havoc in the small south Pacific economy.
The RBNZ provided no reason for the surprise departure of Orr, who was two years into a second five year term but had disagreed with the government of conservative Prime Minister Christopher Luxon about regulation, funding and inflation control.
“I’m stunned by the sudden resignation of the RBNZ Governor," Principal Economist at Infometrics Brad Olsen was quoted in a Reuters article as saying.
“There's more questions than answers."
Orr, who was appointed Governor in March 2018, said it had been a privilege to lead an institution that played a critical role in the economic wellbeing and prosperity of all New Zealanders.
“I leave the role with consumer price inflation at target, and an economy in a cyclical recovery following the long period of COVID-related disruption,” Orr said in the RBNZ statement.
“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.”
