Reserve Bank appoints two new members to interest rate-setting body

The Reserve Bank has appointed two new members to its Monetary Policy Committee.

The committee is an independent decision body that sets the official cash rate.

Former Electricity Authority chief executive Carl Hansen and University of Auckland macroeconomics professor Prasanna Gai will take up their posts in April and July, respectively.

Hansen is an economist and executive director of consultancy at Capital Strategic Advisors, as well as an advisor at Meridian Energy.

He is replacing outgoing committee member Peter Harris and will serve a three-year term.

Gai, who is replacing Caroline Saunders, is the university’s head of the departments of economics, accounting and finance, and property.

He is also a member of the board of the Financial Markets Authority.

Gai will serve a four-year term.

The appointments were made on the recommendation of the Reserve Bank’s board.

Finance Minister Nicola Willis said in order to avoid the potential for conflicts of interest, Capital Strategic Advisors would not carry out work for financial sector clients while Hansen remained a member of the committee.

Hansen would also not take part in discussions relating to Meridian Energy’s fixed-interest funding arrangements.

Reserve Bank board chair Neil Quigley said both Hansen and Gai were highly qualified candidates.

“Their respective business experience at a high level and research expertise on macroeconomics and monetary policy will add fresh perspectives to committee discussions. Both have also worked at central banks previously during their careers.”

Hansen previously worked at the Reserve Bank, while Gai previously worked at the Bank of England and was a special advisor to the Governor of the Bank of Canada.

According to the news on Radio New Zealand

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