Reserve Bank blocks media from talk by OCR committee member Prasanna Gai
The Reserve Bank's commitment to transparency is being called into question again – this time because it blocked media from attending a talk by a member of the powerful committee that sets the Official Cash Rate.
Prasanna Gai talked to a group who paid to attend an Auckland Chamber of
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NZ Herald
4 hours ago
- NZ Herald
Race for Reserve Bank governorship heats up – Christian Hawkesby coy on why he wants the job
'I think they should all be given their fair due right to be assessed.' Others touted to be in the running include former Treasury chief economic adviser Dominick Stephens, Auckland University macroeconomics professor and Reserve Bank Monetary Policy Committee member Prasanna Gai, and Motu Research executive director John McDermott. Stephens is seen to be a safe pair of hands. He has been the Treasury observer on the Monetary Policy Committee and has experience communicating with the public as Westpac's former chief economist. Gai is highly respected globally for his work in academia. He held leadership roles at the Bank of Canada and is a Financial Markets Authority director. Similarly, McDermott is very well qualified and has experience as a former assistant governor and head of economics at the Reserve Bank. There has also been talk of Bank of Canada deputy Governor Toni Gravelle being in the running. However, New Zealand doesn't feature in his CV. The coalition Government has (thus far, at least) appointed known entities to top jobs in the public sector. Secretary to the Treasury Iain Rennie and Public Service Commissioner Sir Brian Roche are examples of this. The Governor role requires expertise in both economics and the regulation of financial institutions. The Governor also needs to be a good communicator and people manager as the head of a large organisation. Hawkesby has experience in the above. Being at the helm of the Reserve Bank since Adrian Orr's sudden resignation in March, he has been leading a major restructure in line with the bank receiving less funding than it anticipated last year. Since Orr's departure, the Reserve Bank board has also followed the wishes of the Government by reviewing whether its bank capital rules need to be loosened. Hawkesby was instrumental in the design and rollout of these rules, as the Reserve Bank's former head of financial stability. The rules make banks stronger, but have been criticised by Willis and other members of the coalition Government for increasing the cost of borrowing. Members of the Government have also been critical of the Reserve Bank's Covid response, which Hawkesby played a key role in. This said, Willis and Prime Minister Christopher Luxon were beaming on Wednesday, when the Monetary Policy Committee cut the Official Cash Rate (OCR) by 25 basis points to 3%, and signalled its intention to give the economy a shot in the arm by cutting the rate more in the future than previously expected. Acting Reserve Bank Governor Christian Hawkesby surprised by the chilling effect US tariff uncertainty had in New Zealand. Photo / Marty Melville More on Wednesday's rate cut, and a misfire in May Speaking to the Herald about this decision on Thursday, Hawkesby was pleased the market interpreted the committee's statement as dovish. Indeed, swap rates, mortgage and term deposit rates, and the New Zealand dollar fell. Hawkesby recognised the committee signalling its intention to eventually cut the OCR to 2.5%, and making it clear that two of its members wanted the OCR to be cut by 50 basis points (rather than 25 basis points), was powerful in moving the market. He stuck by the committee's July decision to keep the OCR on hold, in the face of uncertainty caused by tariffs. However, he conceded that in May he should not have said he had 'no bias' going into the July meeting. This comment confused some observers, making them question the Reserve Bank's commitment to seeing the OCR fall. 'I think if I had my time again, I probably wouldn't have said that,' Hawkesby said, owning up to a misfire in a way his predecessor rarely did. Hawkesby explained he was 'surprised' by the chilling effect uncertainty caused by the United States' tariffs had on New Zealand households and businesses in April, May and June. 'That's the news that we're responding to now,' he said. 'That's the signal to us that interest rates need to go lower to help support the economy and that recovery that needs to happen.' Hawkesby clarified all six Monetary Policy Committee members agreed on the quantum of OCR cuts required. However, their views differed when it came to how quickly to make the cuts. Hawkesby said the committee's central projection was for 25-point cuts in October and November. 'But we've got optionality depending on how the data pans out.' The Monetary Policy Committee will have a new external member when it meets in October, as Bob Buckle's term has just ended. Willis is expected to announce this appointment, as well as the full-term Governor, in coming weeks. Jenée Tibshraeny is the Herald's Wellington business editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.
NZ Herald
18 hours ago
- NZ Herald
NZ sharemarket continues momentum as Skellerup posts strong result
'The OCR [Official Cash Rate] decision yesterday, the lower forecast track and the signal of more cuts has put a bit of a rocket under the New Zealand market,' Lister said. 'While the economy isn't as far from firing on all cylinders, businesses are certainly in better spirits than they were. 'The reporting season is pointing to us having stabilised and passed the worst, and you're actually seeing the odd good result come out.' Skellerup's full-year result was followed by a share price rally of 6.38% or 30c to $5.00 after 380,365 shares changed hands on turnover worth $1.899m. The Red Band gumboot maker said it had made $54.5m in profit after tax, with earnings before interest and tax of $78m. Its profit was in line with expectations, falling in the middle of the $52m to $56m range flagged in July. Lister said Skellerup's outlook statement was positive, pointing to an acceleration in revenue over the next one to three years. Auckland International Airport also reported its full-year results, with a 'solid' net profit after tax up 12% to $310.4m. Its share price fell 0.64% or 5c to $7.75 on turnover worth $11.7m. Lister said the result was nothing of concern, but also nothing to get excited about. 'The result was largely in line with expectations, no real surprises. The outlook was maybe a little on the cautious side to 2026. 'Guided to net profit after tax [npat] of $300m, give or take, I think markets we're expecting north of $300m. They might still actually do better than they're suggesting, but [it is] just a bit of a cautious commentary.' The market's biggest stock, Fisher & Paykel Healthcare, also gave guidance on its first half at its annual meeting. The company's outlook for the full year remains unchanged, with operating revenue in the range of about $2.15 billion to $2.25b and net profit in the range of about $390m to $440m. 'They're clearly trading better than where people expected them to be at this point through the year. It wasn't so much the guidance, it was more the 'here's how we've gone so far this financial year' that they looked quite positive.' Fisher & Paykel Healthcare's share price rose 2.12% or 80c to $38.45 on turnover worth $10.8m. US stocks closed mostly lower on Wednesday local time as the tech sector remained under pressure, while investors kept an eye on retail earnings and weighed the prospect of US Federal Reserve interest rate cuts. The broad-based S&P 500 Index slid 0.2% to 6395.78, while the tech-focused Nasdaq Composite Index declined 0.7% to 21,172.86. The Dow Jones Industrial Average was flat at 44,938.31. The tech pullback comes as markets reached a point where many stocks 'were overbought' after soaring to record highs in recent weeks, Tim Urbanowicz of Innovator Capital Management said. 'But we still view the long-term trend [as] intact,' he said. Among major tech companies, Nvidia shares lost 0.1% and Advanced Micro Devices pulled back 0.8%. Broadcom fell 1.3%. – Additional reporting AFP Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
RNZ News
a day ago
- RNZ News
Midday Report Essentials for Thursday 21st August 2025
money economy 7 minutes ago In today's episode, the Reserve Bank cut the Official Cash Rate by 25 basis points on Wednesday, as expected; Plane spotters lined the streets of outside Whenuapai air base last night to watch the United States Air Force's largest plane touch down; One hundred and forty two jobs could be about to go in Nelson, with the planned closure of the Eves Valley Sawmill.
