Budget Cuts Triggered Central Bank Governor's Exit

Adrian Orr, former governor of the Reserve Bank of New Zealand, unexpectedly resigned in March, officials disclosed Wednesday. Documents indicate his departure stemmed from clashes with the Treasury over slashed budget proposals that Orr argued jeopardized the institution's operations.

Budgetary adjustments, which slashed the central bank's operational funds by 25%, elicited distress for Orr, urging him to conclude his tenure. The revised budget, pegged at NZ$150 million per annum for the next five years, was a compromise between Orr's requested NZ$1.031 billion and government fiscal restraints.

Nick Tuffley, ASB Bank's chief economist, suggested that despite substantial cuts, the current budget remains robust compared to historical norms. Prime Minister Christopher Luxon's government has been critical of Orr, attributing high inflation and interest rates to his monetary policies post-pandemic.

(With inputs from agencies.)