© Reuters. FILE PHOTO: Australia’s new Reserve Bank of Australia (RBA) Governor Philip Lowe speaks at a parliamentary economics committee meeting in Sydney, September 22, 2016. REUTERS/Jason Reed/File Photo
By Wayne Cole
SYDNEY (Reuters) -Australian Treasurer Jim Chalmers on Friday said he would not reappoint the country’s central bank chief to another term, instead replacing him with his deputy Michele Bullock.
Chalmers and Prime Minister Anthony Albanese said Reserve Bank of Australia (RBA) Governor Philip Lowe would leave the bank after finishing his current seven-year term on Sept. 17, marking the end of his 43-year career. Bullock would be the first female governor of the RBA.
In a press conference, Chalmers said it was not out of the norm for a governor to only serve one term and he felt Bullock was best placed to lead the RBA through a coming reorganisation.
“This is a history-making appointment,” Chalmers told reporters. “Michele Bullock will become the first woman to ever lead the Reserve Bank in this country.”
The government has been under pressure to dump Lowe for encouraging people to borrow in 2021 by saying interest rates were unlikely to rise until 2024, only to start hiking two years early in mid-2022.
The central bank has since lifted rates 12 times to a decade-high of 4.1%, adding hundreds of dollars to monthly mortgage repayments at a time when a cost of living crisis is already stretching household budgets.
Just this week, Lowe said it was possible rates would have to rise yet further to bring inflation to heel. He is due to chair the next two policy meetings in August and September.
Lowe had also said he would be honoured to stay at the bank if asked, but would understand if the government wanted a new leader.
His two predecessors, again both career central bankers, were reappointed to second terms and each served 10 years in total.