Australia appoints Michele Bullock as next RBA governor

SYDNEY — Australian Treasurer Jim Chalmers on Friday appointed Michele Bullock as the next governor of the Reserve Bank of Australia for a seven-year term.

The decision elevates Bullock from her current role as Deputy Governor.

“Ms. Bullock is the right person to lead the RBA into the future and ensure we have the world’s best and most effective central bank,” Chalmers said in a joint statement with Prime Minister Anthony Albanese.

“She is an outstanding economist and leader with a deep understanding of the RBA’s role and operations, built up over her long and distinguished career with the central bank,” the statement said.

Bullock, who will be the ninth governor, will oversee the implementation of the recommendations of a recent review of the RBA, “which will ensure we have the most effective central bank and monetary policy framework to meet our current and future economic challenges,” the statement said.

The decision ends months of speculation about the future of the incumbent Gov. Philip Lowe, who has overseen the delivery of a record 400 basis points of interest rate increases since May last year to tame the biggest inflation problem in a generation.

Lowe attracted criticism when he signaled in 2021 that interest rates could remain at record lows until 2024. That guidance was issued amid deep uncertainty surrounding the Covid-19 pandemic and the repeated locking down of the economy as deaths rose.

The ultra-dovish guidance, which fueled a lot of borrowing for mortgages, had to be quickly abandoned when inflation surged globally on the back of the war in Ukraine, exacerbated by supply chain disruptions.

Lowe, who apologized for the sudden shift in outlook, also attracted criticism for being too slow to respond to mounting inflation pressures.

Still, Lowe will depart the job after a career in the central bank that coincided with close to three decades without a recession in Australia, and with the country’s unemployment rate at its lowest level in half a century.

Most economists believe that interest rates are now close to their peak, albeit inflation remains too high.

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