New Zealand central bank head to step down

The head of New Zealand's central bank on Tuesday announced that he will step down in September and would not seek a second term, the media reported.

Reserve Bank of New Zealand (RBNZ) governor Graeme Wheeler's current five-year term will end on September 26, Xinhua news agency reported.

Wheeler has overseen the RBNZ's handling of the ongoing housing crisis, repeatedly warning that soaring home prices were posing a risk to the country's financial security, and a "stubbornly" high New Zealand dollar, which it has described as unjustifiable and unsustainable.

With inflation tracking near zero for much of the last two years, the RBNZ was failing to meet its inflation target range of 1 per cent to 3 per cent until the consumer price index edged up to 1.3 per cent in the last quarter of 2016.

However, the RBNZ's inclination to stimulate demand by lowering its official cash rate (OCR) -- currently at an historic low of 1.75 per cent -- was stymied by the fear of driving soaring house price inflation in Auckland, the country's biggest city and home to a third of the population.

Wheeler headed the introduction of new mortgage lending curbs in order to shield the commercial banks against the effects of a sudden correction in the house market.

"It has been a great privilege to serve in this role, and in the remaining eight months I will remain fully focused on the economic challenges and opportunities facing the New Zealand economy," Wheeler said.

He worked at the World Bank from 1997 until 2010, where he held the posts of managing director operations, vice-president and treasurer, and from 2010 to 2012, he ran his own advisory business in the US.

Minister of Finance Steven Joyce said he had appointed deputy governor Grant Spencer as acting governor for a period of six months at the end of Wheeler's term.

Spencer also serves as chair of the Organisation for Economic Co-operation and Development Committee on Financial Markets, and has held senior management positions at the RBNZ in economics and financial markets.

--IANS

ksk