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Big shake-up for RBNZ: Wheeler to resign Sept; Spencer to fill in

Tuesday 7th February 2017

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Reserve Bank governor Graeme Wheeler won't serve a second term and will be followed out the door by his deputy, Grant Spencer, who will fill in on a temporary basis while the next government hunts out a replacement. 

Wheeler's five-year term expires on Sept. 26, three days after the general election and two days before a monetary policy review. Because of the proximity to the election, Finance Minister Steven Joyce said he judged the most appropriate course of action was to appoint Spencer as acting governor until March 26 next year. Spencer intends to retire after his spell in charge, having previously intended to retire this year. The existing policy targets agreement will remain unchanged during Spencer's caretaker period. 

"Following advice from the Cabinet Office and consultation with Cabinet, I have decided that the most appropriate course of action would be to appoint an acting governor for a six-month period to cover the post-election caretaker period," Joyce said in a statement. "This will give the next government time to make a decision on the appointment of a permanent governor for the next five-year term." 

Wheeler was appointed to the role in 2012, signing a slightly different PTA with then-Finance Minister Bill English, which put a sharper focus on reaching the 2 percent mid-point of the 1-to-3 percent annual inflation target band. 

That's something Wheeler has never achieved during his tenure, as a slump in global oil prices and a persistently strong New Zealand dollar contributed to a low inflation environment that confounded most forecasters. 

In a statement, Wheeler said he remains "fully focused on the economic challenges and opportunities facing the New Zealand economy" and that he had always intended to serve just one term before seeking out governance roles. 

Joyce said Wheeler had "performed his role calmly and expertly during a highly unusual period for the world economy" and thanked him for his service. 

BusinessDesk.co.nz

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