Australia cabinet will soon decide on next RBA governor

By Renju Jose

SYDNEY (Reuters) – Australia Treasurer Jim Chalmers said on Wednesday the cabinet would meet soon to decide the next governor of the country’s central bank, after local media reported that a government decision could be reached as early as this week.

Markets are still in the dark whether Chalmers will extend Reserve Bank of Australia (RBA) Governor Philip Lowe’s (NYSE:) seven-year term when it ends on Sept. 17, or select a replacement following perceived past missteps by the central bank head.

“Soon, I’ll be taking to cabinet my recommendation for the appointment of the governor of the reserve bank. I don’t want to front-run or pre-empt the timing or nature of that conversation with my colleagues,” Chalmers told reporters.

Chalmers, who previously flagged the announcement would be made this month, said he would name his pick immediately after the cabinet meeting but did not specify when it would happen.

The Sydney Morning Herald newspaper, without citing any sources, said in a report late on Tuesday that Lowe’s likely replacement could be unveiled this week.

Lowe has come under fire over his policy messaging during the COVID-19 pandemic, including forward guidance that rates were not expected to rise until at least 2024. The bank has since raised rates 12 times to battle inflation.

Chalmers added that the government has also held preliminary discussions with the opposition over the next RBA governor.

“We’ve had a conversation (with the opposition) about the various people that have been speculated on, including the incumbent Governor Lowe himself,” he told ABC Radio ahead of the media briefing.

Australian media have reported that the front runners for the job include the current RBA deputy governor, Michele Bullock, and the head of the government’s finance department, Jenny Wilkinson, who spent more than a decade at the central bank.

Chalmers declined to comment on media reports about possible names, although he confirmed that he and Lowe would travel to India next week for the G-20 meeting there.

“There are a handful of people that have been speculated upon who, of course, would be qualified. But again, I don’t want to pre-empt the conversation with my cabinet colleagues,” Chalmers told ABC Radio.