Adrian Orr has been named as the new Governor of the Reserve Bank of New Zealand (RBNZ).
“Following the Reserve Bank Board’s unanimous recommendation to me, I have appointed Adrian Orr for a five-year term at the completion of Acting Governor Grant Spencer’s term,” said Grant Robertson, New Zealand Finance Minister, in a release posted on the RBNZ’s website today.
“I’m delighted the Board has been able to secure a Governor with such a strong track record of delivery and public service. Mr Orr has the technical and leadership qualities required to be Governor and CEO of the Reserve Bank. Further, I consider that he has the skills necessary to successfully lead the Bank through a period of change.
“I would also like to thank Grant Spencer for his stewardship in his Acting Governor role. I wish him all the best for his future endeavours from when he finishes his term.”
Orr will take over as RBNZ Governor on March 27 next year after a decade as CEO of the New Zealand Superannuation Fund.
Prior to that role, he served as Deputy Governor and Head of Financial Stability at the RBNZ between 2003 to 2007 and Chief Manager of the Economics Department at the RBNZ from 1997 to 2000.
Outside of the RBNZ, Orr also held the role of Chief Economist at Westpac in New Zealand from 2000 to 2003, along with roles at the National Bank of New Zealand, the Treasury, the OECD and the New Zealand Institute of Economic Research.
Annette Beacher, Chief Asia-Pacific Macro Strategist at TD Securities in Singapore, describes Orr’s appointment as an “excellent choice” given the wide variety of positions he has held during his career.
“A person considered to be an ‘internal’ candidate given his extensive RBNZ experience, but also has widespread ‘outside’ experience including a decade as the CEO of the successful sovereign wealth fund NZ Super Fund,” she said following news of Orr’s appointment.
Financial markets certainly agree with Beacher’s assessment, pushing the NZD/USD to as high as .6904 on the news. It’s currently trading at .6887, up 0.72% for the session.
The AUD/NZD has also fallen on the news, sitting down 0.32% at 1.0916.
“NZD/USD has initially rallied on these headlines, presumably on the basis that Orr is an orthodox candidate, removing a vacuum that could easily have been filled by a less conventional choice intended to execute the government’s bidding, given the changes being made to the Reserve Bank Act,” said Ben Jarman, Economist at JP Morgan, referring to the recent change to the RBNZ’s policy mandate to focus on both inflation and employment.
“Another positive for the government is that this appointment should also act to somewhat soothe foreign investor perceptions about the nature of the changes at the RBNZ after the election.
“Orr’s return delivers continuity through the transition to the dual mandate, and his organisational experience may make it easier for him to wrangle a monetary policy committee with external members, as will be required under the new decision-making structure.”
The RBNZ overnight cash rate currently sits at a record-low of 1.75%, a level it has remained since November 2016.