Move over, Alan Bollard! The Reserve Bank of New Zealand (RBNZ) has a new boss in town and he goes by the name of Graeme Wheeler. He was appointed by New Zealand's Finance Minister Bill English earlier this week, outshining RBNZ Deputy Governor Grant Spencer for the post. Let's take a quick look at his qualifications, shall we?
Prior to being crowned the new RBNZ Governor, Mr. Wheeler spent the past few years taking on significant roles such as managing director operations, vice-president, and treasurer at no less than the World Bank. Before that, he worked in the New Zealand Treasury as deputy secretary and treasurer of the Debt Management Office. If you ask me, this guy's definitely got some serious skillz!
Aside from having extensive experience in the financial markets, Wheeler also has a good reputation for being an effective manager. Most of his peers over at the financial arena, such as former Finance Minister Sir William Burch and Infometrics head Gareth Kiernan, have a high regard for his clear view of the markets and good understanding of the global economic framework.
However, other economic hotshots are concerned about Wheeler's lack of experience with monetary policy and are worried that he might not be the best man for the job. He may have a lot of knowledge on how the international markets tick, but analysts have yet to determine how aggressive he is when it comes to policymaking.
On the other hand, Wheeler's magnetic personality and connections will make it easy for New Zealand to borrow money internationally if necessary. Not only that, his exposure to international policy decisions also makes him more responsive to global trends and developments. As the only person responsible for setting interest rates, Wheeler will need all the edge he can get!
Based on NZD/USD's initial reaction during the Asian session, traders took Wheeler's appointment positively. However, the reaction was limited because at the end of the day, investors still have little or no idea on Wheeler's opinions or plans on how to handle his responsibilities.
Along with a period of record-low interest rates, trade deficit and a strong currency, Wheeler will have to find a way to keep the New Zealand economy afloat amidst the euro zone debt crisis, a possible double-dip recession in the U.S., and a slowdown in China's growth. Talk about having the weight of the world on his shoulders!
Luckily, Wheeler won't be dealing with those problems all at once. He is expected to step into his new office in September, but he will already take part in making new policy-targets with the Ministry of Finance over the next couple of months. Finance Minister Bill English says that the Government is looking for continuity, so he doesn't expect any major changes from the 1% to 3% inflation target.
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