Summarised by Centrist
Foreign Affairs Minister Winston Peters has criticised Reserve Bank Governor Anna Breman for publicly backing US Federal Reserve chair Jerome Powell while he is subject to a criminal investigation in the United States.
Peters said the Reserve Bank of New Zealand is “statutorily independent” of government on monetary policy, but that independence does not extend to commenting on US domestic politics.
“We remind the Governor to stay in her New Zealand lane and stick to domestic monetary policy,” Peters said, adding that the Ministry of Foreign Affairs and Trade was not consulted before Breman signed the statement.
The Reserve Bank said Breman co-signed the international letter expressing “full solidarity” with Powell because she and the bank “believe strongly in the independence of central banks”, after a US Department of Justice probe was launched into his congressional testimony.
However, the letter itself went beyond institutional principle, explicitly praising Powell for having “served with integrity” and for his “unwavering commitment to the public interest”.
The statement was signed by senior central bankers including the heads of the European Central Bank, the Bank of England, the Bank of Canada and the Reserve Bank of Australia.
At this stage, the claim that the investigation threatens central bank independence appears to come from Powell himself, and no court finding has been cited.
Peters said that by endorsing a statement of “full solidarity” in those circumstances, the RBNZ governor crossed from defending a general principle into commenting on a contested legal matter in another country.
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