Reserve Bank Governor Adrian Orr has resigned - but no one’s saying why

Wednesday, 5 March 2025

Reserve Bank Governor Adrian Orr has resigned, in a shock decision that has been left largely unexplained.

A statement said Orr would be resigning effective March 31, about three years before his tenure was set to expire. But Orr took leave effective immediately, and is not expected to return to work.

Deputy Reserve Bank Governor Christian Hawkesby was named acting governor effective immediately as of lunchtime on Wednesday.

Reporters tried to get answers from Finance Minister Nicola Willis and others at Parliament on Wednesday, but ministers refused to shed light on the reason for Orr’s departure.

During a last-minute press conference on Wednesday evening, Reserve Bank board chairman Neil Quigley said Orr had resigned for personal reasons.

Orr was scheduled to deliver a keynote speech at a Reserve Bank conference on Thursday, where he was hosting central bankers from across the world. It was a conference he hyped up during a press conference a few weeks ago, describing it as “two days of cut and thrust excitement”.

Orr would be missing the fun, Quigley said, saying the outgoing governor decided “it would be better not to be in front of the conference”.

Why it matters

The Reserve Bank governor holds a very important position, acting with independence from the Government.

Orr’s sudden departure has fuelled rumour and speculation across the capital.

Quigley only gave hints as to reasons that may have inspired Orr to quit, but he avoided any definitive explanation.

It appeared disagreements between Orr and the Government, surrounding funding of the central bank, had been a critical issue.

Key players

Willis said the Reserve Bank Board informed her of discussions about Orr’s future over “the past few days”.

The board is chaired by Professor Neil Quigley. In a statement, Quigley thanked Orr “for his leadership and commitment”.

Orr first started as Reserve Bank governor in 2018. He was re-appointed governor in 2023, for another five years. He was set to retire as governor at the end of March, 2028.

Who said what

Quigley said he had the board still had confidence in Orr.

“It’s a personal decision he has made and he feels it is the right time for him to make that decision,” Quigley said.

He said his immediate departure was Orr’s decision, but wasn’t an issue.

“It doesn’t make sense for someone like the governor to have a grey period where they have made a decision but then continue to be around the bank,” he said.

Asked repeatedly about the reason for Orr’s departure, Quigley said only Orr could answer that. He described it as “personal”, said there had been no conduct or performance issue to have triggered this decision.

The only “issue” Quigley referred to was around policy and funding from the Government.

“We are, as I say, working through with the government some policy issues, some funding issues,” he said.

But Willis - who’s in charge of funding and central bank policy - would not comment.

“I’m not going to characterise the reasons for Adrian Orr’s resignation,” Willis said, when asked why he’d resigned just minutes after she confirmed the news.

“This is a decision that the Reserve Bank governor has come to. It is therefore for him to characterise,” she said.

Willis confirmed she had been given a heads up “over the past few days”.

She then avoided reporters later in the afternoon, taking back doors out of the debating chamber and through the Beehive, as questions continued to be asked about governor’s surprise exit.

Luxon said he hadn’t been informed been told about those discussions until Wednesday, when it was confirmed.

“Those are issues for them to answer to,” he said. But he said he and the governor had a constructive working relationship.

In a statement, Quigley, the board chairman, said: “Adrian has demonstrated resilience and fidelity to the Bank.”

Orr, in a statement, said: “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. The financial system remains sound. However, there is much work left to do.”

The breakdown

The Reserve Bank operates with a lot of independence from the Government. But it is reliant on the Government for funding, and there appears to have been some debate between the Bank and the Beehive about that.

To ensure independence, the finance minister must consult every political party and seek the Reserve Bank board’s recommendation before recommending an appointment for governor.

It is also very difficult to sack the Reserve Bank governor. They can only be sacked by the governor-general, on advice of both the attorney general and minister of finance if the Reserve Bank board had formally advised there is cause for removal.