Australia has made history by appointing its first female head of the central bank in response to public criticism over rising interest rates, Reuters reports.
Australian Treasurer Jim Chalmers and Prime Minister Anthony Albanese announced that Michele Bullock would lead the Reserve Bank of Australia (RBA) for the next seven years, bypassing the reappointment of current Governor Philip Lowe for a second term. Lowe, who has been at the bank for 43 years, will step down on September 17. Chalmers stated that it is not uncommon for a governor to serve only one term and expressed confidence in Bullock's ability to lead the RBA during an upcoming reorganization.
Chalmers described Bullock's appointment as groundbreaking, emphasizing that she would become the first woman to lead the Reserve Bank in the country. The government faced pressure to replace Lowe after he encouraged borrowing during the COVID-19 pandemic by suggesting that interest rates would not rise until 2024, only to begin hiking them two years earlier in mid-2022. Since then, the central bank has raised rates 12 times to reach a 10-year high of 4.1%, significantly impacting mortgage repayments amidst a cost of living crisis. Lowe even apologized to borrowers who acted based on his earlier assurances.
Bullock's appointment did not cause immediate market reactions, with the Australian dollar remaining flat and Australian bonds rallying in line with global counterparts. Lowe recently mentioned the possibility of further rate hikes to address inflation, and he will chair the next two policy meetings in August and September, leading to divided expectations in the markets.
Lowe expressed confidence in the RBA's future, stating that it is in good hands as it tackles the current inflation challenge and implements the recommendations of the Review of the RBA. Bullock, a highly respected figure with extensive experience at the RBA since 1985 and a master's degree from the London School of Economics, was seen as a sensible choice by analysts. She acknowledged the challenging time to assume the role but expressed confidence in her executive team and board's support as the RBA undergoes significant reorganization based on an independent review.
Comments (0)