RBNZ’s new Swedish boss joins bank shaken by politics, says ‘kia ora’

By Lucy Craymer

WELLINGTON (Reuters) -New Zealand’s first foreign central bank governor in modern history takes the top job amid heightened criticism of the bank’s management of the economy and as independent monetary policy around the world comes under political pressure.

Anna Breman, 49, currently the deputy governor of Sweden’s Riksbank, was picked after a worldwide search in which 300 candidates were identified, New Zealand said on Wednesday.

She joined the Swedish central bank’s executive board in 2019, contributing to decision-making including monetary policy, financial stability, and national payments systems, and became First Deputy Governor in 2022.

Not a lot is known about her views on monetary policy. Riksbank surprised markets by cutting rates on Tuesday and Breman voted for the move, while one other deputy advocated for no change.

At the press conference in Wellington after her appointment, Breman said RBNZ would “stay laser focused on delivering low and stable inflation.”

Breman said in a speech in March about Sweden’s economy that the task of monetary policy is to contribute to economic stability by holding inflation close to 2% and maintaining confidence in the inflation target.

“This is important not least in times of uncertainty. If we judge that the outlook for inflation and economic activity is changing, we will adjust monetary policy,” she said.

Breman takes the helm at the Reserve Bank of New Zealand as it faces criticism for abetting a surge in inflation by pumping billions of dollars of stimulus during the pandemic. It was then forced to engineer a recession with high interest rates to get prices back under control.

Her appointment also comes as the notion of central bank independence comes under increasing political pressure globally.

In another speech in London in June, Breman said central banks needed to “be prepared for the fact that monetary policy may need to be conducted and communicated in a politically and economically more uncertain world in the future.”

‘KIA ORA’

Breman, a Swedish national, started her speech on Wednesday, with “kia ora”, New Zealand’s Maori-language greeting, and told reporters she would be keen to learn more about the Maori economy and the country’s culture.

Under Orr, the RBNZ put Maori heritage and language at the centre of its operations, resulting in some bold changes not only to its branding but also its approach to policy and communication.

Such reforms have since fallen out of favour with the current centre-right government, which has wound back Maori language use and ended some empowerment policies in other agencies.

Breman added she was looking forward to travelling the country and meeting people in business and the community, something she did in her role at the Riksbank.

She is married and has two teenage daughters and said that the entire family was looking forward to moving to Wellington later this year.

She is known as an advocate of integrating climate change into the policy thinking.

Breman, who also becomes RBNZ’s first female governor, has previously been group chief economist and global head of macro research at commercial lender Swedbank and also worked at the Swedish Ministry of Finance, the World Bank and as a researcher at the University of Arizona.

She holds a PhD in Economics from the Stockholm School of Economics. Last year, she was awarded an honorary doctorate at the School of Economics and Management at Lund University.

(Reporting by Lucy Craymer; writing by Praveen Menon; Editing by Sam Holmes)