Australia’s Treasurer to announce next RBA governor in July

SYDNEY — Australian Treasurer Jim Chalmers said Thursday that he expects to announce the next governor of the Reserve Bank of Australia in July.

“My intention is to come to a concluded view on the RBA Governor and announce that in July,” he told reporters in Canberra.

“I’m in the process of consulting with my cabinet colleagues and with others. This is a big job and so it’s a big call. And so, we’ll work through it in the usual methodical and considered way,” he added.

The current term of the central bank’s governor, Philip Lowe, ends in mid-September, and Chalmers is favored to choose a new face, potentially somebody from outside the RBA who will implement change.

The government announced a review of the RBA earlier this year that called for significant changes in the area of internal culture and the setting up of a dual-board system, with one for policy setting and the other for governance.

With the economy still facing its biggest inflation challenge in more than 30 years, the choice of who the next governor will be is crucial for financial markets, amid growing fears that further rate hikes will be needed over the coming months, increasing the risk of a recession.

Lowe has presided over a record run of interest-rate increases since May last year, raising the official cash rate by 400 basis points to 4.10% in that time.

It is possible that Lowe will get an extension of his term, which has been the case for the last two heads of the central bank. But he has also been the subject of a public backlash against the pace of tightening and rapidly shifting guidance, fanning tensions with Canberra, and making his reappointment unlikely.

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