Introduction to New Zealand’s New Reserve Bank Governor
New Zealand’s fifteenth Reserve Bank Governor, Anna Breman, was introduced to the public for the first time in a Beehive hallway with Finance Minister Nicola Willis on Wednesday. Despite being a prominent figure in the world of central banking, nobody recognized her. A report by Bloomberg had confirmed that the new governor would be a woman and a foreigner, both of which are firsts for the bank, but nobody had expected the name of this 49-year-old Swedish central banker to be announced.
Who is Anna Breman?
Breman has an impressive background, with a PhD from the Stockholm School of Economics. She has worked for the Swedish finance ministry, taught at the University of Arizona, and risen to become Group Chief Economist at Swedbank. In 2019, she was appointed Deputy Governor at the Swedish central bank, Sveriges Riksbank, and was promoted to second-in-command as First Deputy in 2022. Her experience and qualifications make her an accomplished candidate to lead the Reserve Bank of New Zealand.
Monetary Policy Experience
During her time at the Riksbank, Breman was involved in monetary policy decisions that followed a broadly similar trajectory to the RBNZ, albeit more moderately. The Riksbank held its policy rate at zero and purchased bonds to keep long-term interest rates low. After Russia invaded Ukraine in 2022, it reversed course and hiked rates by 400 basis points by the end of 2023. Sweden started cuts in May 2024 and has lowered its policy rate to 1.75%. This experience will likely influence her decisions as the new governor of the RBNZ.
Challenges Ahead
Breman’s six-year term at the Riksbank was set to end on November 30, 2025, but she will step down a month early to start at the RBNZ on December 1. This will give her two and a half months in office to prepare for her first monetary policy statement, scheduled for February 18th. Between now and then, she will be learning the inner workings of New Zealand’s idiosyncratic economy. One of the challenges she will face is the steep learning curve of understanding how shocks are transmitted across the Asia-Pacific region.
Reaction to the Appointment
Rodney Jones, a principal at Asia-focused macro advisory firm Wigram Capital Advisors, expressed disappointment that an international candidate had been appointed, citing the need for regional expertise. However, Breman has already stated that she feels familiar with the Kiwi economy and is looking forward to learning more. She has emphasized the importance of transparency and has promised to make herself widely available to the public as RBNZ Governor.
Building Trust and Credibility
Breman’s goal is to build back the RBNZ’s bruised reputation by providing stability and morale after recent controversies and resignations. She believes that transparency, accountability, and clear communication are key to building trust and credibility. Her approach will likely involve traveling the country, meeting with people from different kinds of businesses, and ensuring that more people from the Reserve Bank are available to meet households.
Expert Opinion
Economists have praised Breman’s appointment, citing her qualifications and experience. John Carran, the chief investment officer at SFS Private Wealth, said that Breman appeared to be a great appointment and would be very focused on the Reserve Bank’s core roles of inflation control and financial market stability. Satish Ranchhod, a senior economist at Westpac NZ, noted that Breman was well-suited to leading the RBNZ, but her role would include prudential regulation, unlike at Sweden’s central bank.
Potential Changes to Monetary Policy Communication
Breman’s most recent speech was about the benefits of the Riksbank’s abnormally transparent policymaking process and announcements. She may consider making changes to how the Reserve Bank announces and communicates its policy decisions in the Summary Record of Meeting. This could involve publishing what specific committee members said during policy discussions, as well as a rate forecast and alternative scenarios.
Conclusion
Anna Breman’s appointment as the new Reserve Bank Governor of New Zealand is a significant development for the country’s economy. With her impressive background and experience in monetary policy, she is well-equipped to lead the RBNZ and provide stability and morale after recent controversies. Her emphasis on transparency and clear communication will likely help to build trust and credibility with the public. As she prepares to take office, Breman will face challenges, including the steep learning curve of understanding New Zealand’s idiosyncratic economy. However, with her qualifications and experience, she is poised to make a positive impact on the country’s economy.
