New Zealand named Anna Breman as the new Reserve Bank governor, appointing a woman to the role for the first time as it seeks to refresh an institution damaged by the unexpected departure of predecessor Adrian Orr earlier this year.
Breman, who is currently First Deputy Governor of Sweden’s Riksbank, will start a five-year term on Dec. 1, Finance Minister Nicola Willis said Wednesday in Wellington. Acting Governor Christian Hawkesby will stay in the role until then before departing the RBNZ, she said.
“Dr Breman comes to New Zealand with an impressive blend of technical skills and organizational leadership experience,” Willis said. While gender was not a consideration, “it certainly makes a difference if young women and girls can see that there is no office that cannot be occupied by a woman,” she said.
Breman, 49, is not only the first woman ever named to head the RBNZ, she is also the first foreign appointment since Englishman Leslie Lefeaux, the inaugural governor when the central bank was established in 1934.
She will arrive at a time when the New Zealand economy is struggling to recover from recession and as the RBNZ grapples with the fallout of Orr’s March exit, which led to a restructuring and further departures including that of board chair Neil Quigley.
The New Zealand dollar was steady at 58.63 US cents after the announcement, while the yield on policy-sensitive two-year notes were little changed at 2.76%. Traders maintained expectations the RBNZ will cut the Official Cash Rate at each of the two remaining meetings this year, which will be held before Breman takes office.
“Everyone will be busy AI’ing is she dove or hawk, and will get mixed answers,” said Imre Speizer, a strategist at Westpac in Auckland. “The main point is she starts after the October and November meetings, so the easing may be done before she starts.”
‘Laser-Focused’
Breman, who joined Willis at a news conference to make the announcement, declined to comment on the RBNZ’s current monetary policy. However, under her leadership the RBNZ would remain “laser-focused” on low and stable inflation, she said.
“The Reserve Bank should and it will remain a source of strength and stability for the New Zealand economy,” she said. “Together with the board and with staff, we will achieve this by focusing on our core mandate.”
While still in the minority, the number of women leading central banks is growing. The RBNZ joins peers including the Reserve Bank of Australia and the European Central Bank in having a woman at the helm.
Breman was appointed to her current role as No. 2 at the Riksbank in September 2022 and has been on its Executive Board as a deputy governor since 2019. She holds a PhD in Economics from the Stockholm School of Economics and has previously worked at the Swedish Ministry of Finance and the World Bank.
As RBNZ governor, she will chair the Monetary Policy Committee, which sets interest rates with the aim of keeping inflation around the 2% midpoint of a 1-3% target range over the medium term.
The Riksbank also aims for 2% inflation within a 1-3% “variation band.”
That makes Breman “very well placed to the lead the RBNZ,” said Andrew Ticehurst, a senior rates strategist at Nomura in Sydney. “I see no implications for the New Zealand cash rate outlook from this announcement.”
In August, the RBNZ cut the OCR to 3% and projected it would fall to 2.5% by the end of the year. But data last week showed the economy unexpectedly slumped 0.9% in the three months through June, prompting some economists to predict a 50 basis-point cut at next month’s decision and a 2.25% cash rate by the end of the year.
As governor, Breman will also be chief executive of an institution that is the prudential regulator for all lenders and insurers, operates the nation’s wholesale payment and settlement systems and is responsible for its banknotes and coins.
Tumultuous Year
Willis will be hoping the appointment settles a tumultuous year for the RBNZ, sparked by Orr’s March 5 decision to stand down with three years left on his second five-year term. It took the RBNZ three months to explain that Orr left because of his disappointment with new funding arrangements with the government, and even longer to disclose there had been issues between him and the board over his conduct.
Breman said the key component to build trust and credibility “is transparency and openness.”
“The Reserve Bank sits high in international rankings on transparency, but I do believe that there is more work that needs to be done,” she said. “So we will strive for transparency, accountability and clear communication within all the work that we do.”
The appointment continues a pattern of New Zealand looking outside the bank for the top job. The last time a deputy was promoted was Dick Wilks in 1982, with the five permanent governors since then all external selections.
The governor’s pay was NZ$804,000 ($471,000) in the 12 months ended June 2024, the most recent disclosure, making them one of the best-paid public servants in New Zealand.
Willis thanked Hawkesby, who had applied for the permanent role, for his “admirable job of filling in as governor.”
The Riksbank said Breman will step down from her current role on Oct. 10.
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