However, as Finance Minister Nicola Willis explained, \u201cIt has been the practice for successive governments to exercise restraint in making significant appointments in the pre-election period, which begins on August 7.\u201d<\/p>\n
Accordingly, Breman, an economist from Sweden, said it was \u201cunlikely\u201d the position would be filled in the near term. <\/p>\n
\u201cI don\u2019t know if it\u2019s possible to have a temporary position. That\u2019s apparently what\u2019s happened before, so I\u2019m just looking into that.\u201d<\/p>\n
By law, the role needs to be filled by someone who works at the Reserve Bank, as the committee needs to be comprised of four Reserve Bank staff and three externals.<\/p>\n
Breman was tight-lipped when pressed on why it was taking so long to make an appointment, saying there was a process to go through. <\/p>\n
A Reserve Bank spokesperson clarified that after Orr\u2019s resignation, the board decided to keep the MPC role vacant until a permanent governor was appointed. <\/p>\n
\u201cThe vacancy continued to be carried after the Governor commenced her role in December 2025, while we recruited for vacant roles that would have been the most likely to fill the internal MPC role. A process is now underway.\u201d<\/p>\n
Looking at the Reserve Bank more broadly, Breman said the organisational structure created following a restructure last year would be maintained. <\/p>\n
While the Reserve Bank expects it will spend $120 million on staff in 2026-27 \u2013 $3m more than it spent in 2024-25, when the organisation burgeoned and $29m more than it expected to spend in 2025-26 after its restructure \u2013 Breman said it wasn\u2019t expanding.<\/p>\n
Rather, she said it was trying to fill various vacant roles. <\/p>\n
\u201cWhen you have a large restructure, it takes just a little bit longer to rehire.\u201d<\/p>\n
Dual mandate debate<\/p>\n
Breman was careful to remain apolitical when asked whether the Government should continue requiring the MPC to solely be tasked with keeping the annual inflation rate between 1% and 3%, or whether it should also be required to maintain \u201cmaximum sustainable employment\u201d. <\/p>\n
Labour is likely to join New Zealand First in campaigning on reinstating the dual mandate it introduced in 2019.<\/p>\n
While a dual mandate may appear \u201cworker friendly\u201d, the jury is out over whether it would make much difference to the way the OCR was set.<\/p>\n
Asked whether interest rates would be lower now if there was a dual mandate, Breman said it was hard to comment. <\/p>\n
\u201cWe would always look at how the labour market is affecting inflation, and how inflation and what we do with interest rates are affecting the labour market. They\u2019re not unrelated, and over the medium term, they tend to give the same outcome,\u201d she said.<\/p>\n
\u201cTo me, it\u2019s important that people understand that getting back to low and stable inflation is also good for growth and jobs.\u201d<\/p>\n
Put simply, if prices only rose modestly, people would be able to spend more, which would support businesses and job growth.<\/p>\n
Breman also made the point that the MPC\u2019s remit requires it to maintain price stability while avoiding \u201cunnecessary instability in output, employment, interest rates, and the exchange rate\u201d.<\/p>\n
She refrained from signalling what the committee may do with the OCR when it next meets on September 2, but reiterated what the committee said after its last meeting \u2013 that global volatility was such that the timing of future OCR increases was \u201chighly uncertain\u201d.<\/p>\n
Financial stability and inclusion<\/p>\n
Turning to the way the Reserve Bank regulates banks, Breman believed the current loan-to-value ratio (LVR) and debt-to-income (DTI) restrictions<\/a> imposed on mortgage lending were \u201cappropriate\u201d. <\/p>\n These restrictions limit the amount banks can lend to borrowers with small deposits, and borrowers seeking a lot of debt relative to their incomes. <\/p>\n As for the public consultation the Reserve Bank just did on whether banks need to make it easier for people to trade using cash, Breman stressed she wanted banks to make any changes voluntarily. <\/p>\n In February, the Reserve Bank proposed setting a minimum standard that would require banks to establish between 1300 and 3000 additional free-to-use cash services sites, depending on whether they pooled resources to set up hubs that could be used by customers of any bank, or worked individually to set up more ATMs and branches.<\/p>\n Banks said they were \u201cblindsided\u201d<\/a> by the over-the-top proposal. In April, the Reserve Bank backed down<\/a>, saying the standard would be voluntary and it wanted to work with banks on a solution. <\/p>\n Its director of money and cash, Ian Woolford, who previously ruffled banks\u2019 feathers by being a proponent of them holding a lot of capital, retired. <\/p>\n The Reserve Bank received nearly 6000 submissions in response to its consultation. It will release its findings in late September. <\/p>\n Breman confirmed she had only seen a draft of the consultation before it was sent out. She couldn\u2019t remember whether the draft detailed the number of new ATMs and cash service sites the Reserve Bank proposed banks set up. <\/p>\n Ultimately, she said the issue was one of financial inclusion. <\/p>\n \u201cThere are certain groups that for various reasons want to be able to pay with cash. And they should have that possibility,\u201d she said<\/p>\n \u201cThen we have the fact that for crisis preparedness, we need to have cash in circulation … And then there\u2019s also privacy reasons why people should have the option to pay with cash.\u201d<\/p>\n Jen\u00e9e Tibshraeny is the Herald\u2018s Wellington business editor, based in the Parliamentary Press Gallery. She specialises in government and Reserve Bank policymaking, economics and banking.<\/p>\n