Australia has made history by appointing the first female head of its central bank, the Reserve Bank of Australia (RBA), in response to public criticism over soaring interest rates.
Treasurer Jim Chalmers and Prime Minister Anthony Albanese announced on Friday that Michele Bullock, the former Deputy Governor of the RBA, would lead the institution for the next seven years, bypassing the current governor, Philip Lowe, for a second term.
Lowe, who has served at the bank for 43 years, will step down on September 17, coinciding with his attendance at a Group of 20 meeting in India next week. Chalmers defended the decision, stating that it is not uncommon for a governor to serve only one term and expressing confidence in Bullock’s ability to navigate the forthcoming reorganization of the RBA.
“This is a history-making appointment,” said Chalmers in a press conference. “Michele Bullock will become the first woman to ever lead the Reserve Bank in this country.”
The government faced pressure to replace Lowe due to his encouragement of borrowing during the COVID-19 pandemic. Lowe had initially assured the public that interest rates would not rise until 2024, but the RBA began increasing rates in mid-2022, causing mortgage repayments to surge. Lowe even issued an apology to borrowers who had relied on his assurances.
Bullock’s appointment coincided with a relatively calm market response, with the local dollar remaining stable and Australian bonds rallying in line with their global counterparts. The recent soft reading on U.S. inflation has also tempered expectations of further rate hikes in Australia, potentially easing Bullock’s responsibilities for managing interest rates going forward.