Reserve Bank about to appoint first female governor

Tuesday, 23 September 2025

The men who have led the Reserve Bank of New Zealand since the 1930s have their portraits hung in the Wellington office. Could a woman soon join them?

Finance Minister Nicola Willis expects to announce the next governor of the Reserve Bank at 1pm on Wednesday, but some details are already leaking.

The Post understands, and Bloomberg has reported, that the bank will be getting its first female governor and that the successful candidate is living overseas.

Bank of England deputy governor Sarah Breeden, Bank of Canada deputy governor Toni Gravelle, and American economist Catherine Mann ‒ who attended an international conference held by the Reserve Bank in Wellington in March and is also on the Bank of England’s monetary policy committee ‒ had been talked about as being possible candidates before Gravelle reportedly ruled himself out.

Breeden, who is less than half-way through her five-year term at the Bank of England, was the name most often being mentioned in association with the role on the rumour mill on Tuesday.

A spokesperson for Willis would not comment, saying the appointment was market-sensitive.

The new governor will be joining the bank during a period of turmoil.

The role for a new governor opened up as a result of former governor Adrian Orr walking out of the bank part way through his term in February after a breakdown in his relationship with bank’s board over its response to swingeing budget cuts.

Christian Hawkesby has been acting in the role since Adrian Orr’s sudden departure.

Reserve Bank chairperson Neil Quigley subsequently resigned amid criticism over the adequacy of the explanation he gave for Orr’s departure. The bank is expected to detail how it is implementing its budget cuts next month.

An appointment from overseas will continue the practice of past governments usually appointing candidates who are external to the bank.

The Reserve Bank’s acting governor, Christian Hawkesby, who stepped into that role following Orr’s departure, had made it clear he had “dusted off his CV” and put his hand up for a full five-year term.

How decisions on the official cash rate are made

The Reserve Bank’s monetary policy committee meets about every seven weeks to issue a monetary policy statement or review the official cash rate.

The committee only came into being in 2019 and its current members are Reserve Bank acting governor Christian Hawkesby, assistant governor Karen Silk, chief economist Paul Conway and the committee’s independent members Professor Bob Buckle, Carl Hansen and Prasanna Gai.

Buckle is retiring from the committee next week, when he will be replaced by former agribusiness executive Hayley Gourley.

Before 2019, responsibility for interest-rate decisions lay solely with the Reserve Bank’s governor, although each did consult first with a committee comprised of senior staff from the bank.

How does it reach decisions?

The members of the monetary policy committee are obliged under the Reserve Bank’s charter to seek a consensus when making decisions, including on the OCR.

If they can’t reach a consensus, then decisions can be made by a simple majority vote.

This has happened three times, the first in May 2023 when the committee voted 5-2 to raise the OCR by 25 basis points to 5.5%. The dissenting members wanted to keep the rate unchanged at 5.25%.

It has been split twice this year, voting 5-1 to cut the OCR by 25 basis points to 3.25% in May and 4-2 in August to cut it again to 3%, with the dissenting duo wanting a deeper cut.

The bank doesn’t reveal who among the committee votes which way.

What else does the bank do?

Setting the OCR and determining monetary policy aren’t the bank’s only jobs, although they are the ones that attract the most attention.

Its other responsibilities include regulating banks and insurers, which includes controlling aspects of mortgage lending, and runs the payment and settlement systems that banks use to transact with one another.

It designs and issues notes and coins and it can intervene in currency markets, using its reserves to influence the value of the New Zealand dollar.

In an emergency, it can prop up failing financial institutions with loans, and it manages the Deposit Takers Act scheme that is designed to protect people bank deposits.

– Additional reporting by Henry Cooke