By Stella Qiu
WELLINGTON, Feb 18 (Reuters) – New Zealand’s central bank chief played a straight bat at her inaugural policy meeting on Wednesday, with a focus on getting her messaging right and avoiding the missteps of her predecessor.
Anna Breman, a 49-year-old Swedish national, became the Reserve Bank of New Zealand’s first female governor in September last year, following a worldwide search in which 300 candidates were identified.
She replaced former governor Adrian Orr, who resigned suddenly in March last year amid heightened criticism of the bank’s management of the economy.
At her first monetary policy meeting, the bank kept the official cash rate (OCR) unchanged, as expected, but hosed down market expectations for a rate hike, stressing the fragile economic recovery still needed settings to stay loose.
In her debut post-decision press conference, closely watched by investors, Breman began with a slide presentation lasting about 10 minutes, much longer and more graphically led than Orr’s low-key opening statements at his briefings.
“New Governor, Anna Breman, made her mark with an exceptionally simple, well delivered, statement and OCR track. Something which in the past, as recently as November, has not been well executed,” said Jarrod Kerr, chief economist at Kiwibank.
FRESH CHALLENGES, FRESH AGENDA
Under Orr, the RBNZ was criticised by politicians and analysts for fanning inflation by pumping billions of dollars of stimulus during the pandemic. It was then forced to engineer a recession with high interest rates to get prices back under control.
Breman said New Zealand’s economy was in early stages of a recovery but that it was also true that many households are not feeling it yet.
“We want to keep the OCR on hold to support the recovery while ensuring that inflation falls back to target,” said Breman. “We’re not planning on hiking the OCR until we see more inflationary pressures and a stronger economy.”
She also announced that the central bank would have eight monetary policy meetings next year from seven, responding to critics who said a long summer break made policy communication unclear.
Her appointment also came as the notion of central bank independence comes under increasing political pressure globally.
Breman was publicly rebuked by New Zealand’s foreign minister last month for signing a statement alongside other global central bank chiefs in support of Federal Reserve Chair Jerome Powell, who has been threatened with a criminal indictment by the Trump administration.
The RBNZ later said Breman had signed the statement because she believed strongly in the independence of central banks.
In her presentation on Wednesday, Breman made a brief but clear nod to threats to central bank independence generally as among a host of risks globally.
“In the medium-and-longer-term unsustainable fiscal dynamics in some countries and pressure on central bank independence could also be a cause for concern,” she said.
‘LOVE NZ’
Breman did not use Maori language in her spoken remarks on Wednesday, a break from Orr’s practice of beginning his briefings with an Indigenous greeting and referring to the RBNZ by its Maori name, Te Putea Matua.
Under Orr, the RBNZ put Maori heritage and language at the centre of its operations, resulting in some bold changes not only to its branding but also its approach to policy and communication.
At her first New Zealand media briefing in September, Breman told reporters she would be keen to learn more about the Maori economy and the country’s culture.
Breman was in the Swedish central bank’s executive board in 2019, contributing to decision-making including monetary policy, financial stability, and national payments systems, and became First Deputy Governor in 2022.
She is married and has two teenage daughters and said she was loving life in New Zealand so far, joking about the nation’s obsession with rugby.
“I’m here with my family now and we’re really happy to be here,” said Breman. “We think it is a lovely place to live. People are really friendly.”
(Writing by Praveen Menon; Editing by Sam Holmes)
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