Adrian Orr was reelected for a second term as head of RBNZ

Adrian Orr was appointed for a second time as the head of the Reserve Bank of New Zealand (RBNZ). He was unanimously recommended by the Reserve Bank Board. Adrian Orr will enter his second five-year term on March 27. 

According to Finance Minister Grant Robertson, Orr showed enough knowledge and experience to help the financial system go through the economic shock which occurs once every 100 years and overcomes the consequences of the coronavirus epidemic. Also, Grant said that he has full confidence in Orr’s leadership and his ability to act in difficult conditions.

59-years old Orr has already been chairman of RBNZ earlier in 2018. He was running the bank during the pandemic, reduced the credit rates to a record level, and increased the money supply to support the economy. Now he, like many other leaders around the world, tries to decrease inflation after such a significant monetary stimulus.

The Reserve Bank of New Zealand was among the first central banks which increased the rates in 2021. It caused excessive growth earlier this year. Similar steps have been taken in other countries.

However, Orr had to protect the bank from criticism. The bank was accused of providing too much stimulus and driving inflation to a 32-year high of 7.3%. 

During the last year, the bank increased the official cash rate by 3.25%. Currently, it amounts to 3.5%, and it was the strongest tightening since the introduction of this rate in 1999. 

Two-year expectations on inflation grew from 3.07% to 3.62% and were published in the quarterly survey of RBNZ. The bank will have to make a lot of effort to bring inflation back to the target range of 1-3%.

According to Robertson, the bank has undergone major changes since Orr took office in 2018. This has greatly influenced the bank's strategy, culture, and staff. As chairman, Orr has played a major role in bringing about these changes, and his new appointment is an opportunity to continue the work.

Adrian Orr entered the second term when the government was reforming RBNZ. It implemented the dual mandate like in the Federal Reserve and the enlarged Monetary Policy Committee with external members.