Australia’s central bank deputy to take the helm

SYDNEY — Reserve Bank of Australia (RBA) Deputy Governor Philip Lowe will take the helm of the central bank in September when current Governor Glenn Stevens retires, Treasurer Scott Morrison said on Thursday.

The announcement comes just days before Prime Minister Malcolm Turnbull is expected to officially call for a July 2 election. Mr Turnbull has indicated he will likely do so this weekend.

Mr Lowe, 54, has been at the central bank for 36 years and has been deputy governor for four years. His ascension to the top job was widely expected.

Financial markets consider Lowe a safe pair of hands as the Australian economy weathers the end of a once-in-a-century boom in mining investment and shifts to more service-led forms of growth.

“He was endorsed by Stevens and it will allow continuity at the central bank, so the appointment is not much of a surprise,” said Janu Chan, senior economist at St George Bank.

“It’s an extremely challenging time. He’ll be in an environment where interest rates have never been lower before.

And there is still that pressure on central banks to do more even though there are limitations to what they can do,” Ms Chan said.

Earlier this week, the RBA cut interest rates to an all-time low of 1.75%, citing unexpectedly low inflation.

Mr Lowe’s seven-year term as central bank chief starts on September 18, when Mr Stevens, 58, steps down. In 2013, the incumbent had his appointment as governor extended for three years.

Mr Morrison, in a statement, congratulated Mr Lowe and thanked Mr Stevens “for his valuable leadership of the RBA over the past ten years”.

“International developments required Mr Stevens to steward the RBA through a challenging decade for the Australian economy, which included the global financial crisis, the passing of a once in a generation terms of trade boom, and the rise and fall of an unprecedented mining investment boom,” the treasurer said.

Mr Morrison said the appointment of a new deputy governor will be considered in the second half of the year.

Reuters

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