11 Dec 2017

Adrian Orr appointed Reserve Bank Governor

5:56 pm on 11 December 2017

The chief executive of the Superfund, Adrian Orr, has been appointed as the new Reserve Bank Governor.

He will take up the role on 27 March, 2018.

Adrian Orr, Super Fund CEO

New Reserve Bank Governor Adrian Orr Photo: NZ Super Fund

The Finance Minister, Grant Robertson, said he was delighted the Bank's board was able to secure a Governor with such a strong track record of delivery and public service.

"He's run the Super Fund extremely well, it is one of the most successful sovereign wealth funds in the world and so I think the experience he got working in, I guess what I would call the real economy, will be very useful as we move forward down the path of change that we're going down with the bank."

The government is planning to change monetary policy so the Reserve Bank has to take employment into account when setting the official cash rate and has appointed an advisory committee on how best to achieve this.

Mr Robertson said Mr Orr is the right person to lead the bank through this period.

"Mr Orr is delighted to take up the appointment, he sees it as a great honour to serve his country in this role, obviously he was the deputy governor so he has spent time at the bank and it's a role I think he is very much looking forward to."

Mr Robertson thanked the acting Governor, Grant Spencer, for his work in the role and wished him all the best.

The appointment has taken the market by surprise.

Infometrics' chief forecaster, Gareth Kiernan, said Mr Orr would probably be taking a large pay cut to take up the role, vacated by the former governor, Graeme Wheeler, who retired at the end of September.

Mr Kiernan said Mr Orr wasn't seen as a frontrunner for the job, although he had the right credentials.

"You know, he's been there for a few years now and this presents a new challenge, and in some respects going back to what he knows best, given his previous experience at the Reserve Bank, so the challenge is there for him and that probably makes up for some of the loss in pay that he is likely to be getting as a result of the change in job."

Mr Kiernan said the market would be comfortable with the appointment, which saw the kiwi dollar spike up about half a cent against the US dollar - above US69 cents.

In February the Prime Minister Bill English and the State Services Commissioner Peter Hughes criticised the enormous 23 percent payrise Mr Orr pocketed while heading the New Zealand Superannuation Fund.

Two years earlier Mr Orr received a $130,000 payrise.

Mr Robertson said Mr Orr's new salary will be a matter for the Reserve Bank board but that it will be a "significant pay cut".

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