Annual Report 2025

Firstly, I would like to thank Adrian Orr, who resigned from the role as Governor in March 2025. Adrian led a modernisation of our legislation and significant maturity uplift in the capacity and capability of our people, our balance sheet, and our systems, data, technology and governance frameworks, contending with the uncertainty created by the COVID-19 pandemic.

Adrian has set us up well for the future and leaves us at a time when inflation is within our operational target band, and the financial system remains stable, notwithstanding a period of significant headwinds and ongoing geopolitical and trade uncertainty.

I would like to thank Neil Quigley, who stepped down as our Board Chair shortly before the publication of this report. Neil was instrumental in leading the Reserve Bank through a period of profound change, from strengthening our capital framework and governance arrangements to overseeing the transition to the new Board model under the Reserve Bank of New Zealand 2021 Act. We are grateful for his commitment and stewardship, and the strong foundations he leaves for the future.

I would also like to welcome Dr Anna Breman as the new Governor starting in December 2025. I look forward to supporting Dr Breman and leading the Reserve Bank through the transition. I will then be departing at the end of my term as Governor. I would like to take this opportunity to thank the Reserve Bank staff for their support and contributions during my nearly seven years across a range of leadership roles.

We continued to operate in a challenging external environment both domestically and internationally.

Over the course of the financial year, the MPC lowered the official cash rate (OCR) to 3.25% (as at 30 June 2025) and observed consumer price index inflation return to the 1 to 3% target band. The Committee lowered the OCR further to 3% in August 2025.

Despite an increase in inflation during the first quarter of 2025 and a rise in some inflation expectation across firms and households, we have seen core inflation continue to decline and there is spare productive capacity in the economy. These conditions are consistent with inflation returning to the mid-point of the 1 to 3% target band over the medium term.

We also continue to focus on implementing the recommendations from the Review and Assessment of the Formulation and Implementation of Monetary Policy. Significant progress was made on research related to the nine recommendations and all planned research projects are now complete.

We continue to progress significant work to implement the DTA and DCS:

• We published our response to the deposit taker core standards consultation. The response sets out the prudential requirements deposit takers will need to meet to be licensed under the DTA.
• The DCS commenced on 1 July 2025. This was a significant milestone for New Zealand. The scheme protects depositors for up to $100,000 per depositor per institution in the unlikely event that their bank or other licensed deposit taker fails.

We published our submission to Parliament’s FEC Inquiry into Banking Competition. Our submission outlined the Reserve Bank’s financial stability mandate, and highlighted areas where we can support competition in the banking sector.

We released updated financial stability indicators, providing a more comprehensive view into the indicators used when assessing risk. These additions offer enhanced insights into recent developments, helping to give a better understanding of the current economic landscape.

We released our first voluntary climate-related disclosure – Ngā Whakapuaki e Pā ana ki te Āhuarangi – outlining our progress in understanding, monitoring, and managing climate-related risks. Our inaugural disclosure is focused primarily on ‘baseline’ indicators, the foundational information that the Network for Greening the Financial System recommended central banks should provide.

This year we were proud to be recognised among our global peers as the winner of two categories at the Central Banking Awards: Corporate Services Initiative Award for our Information Management Uplift, and the Green Award for our climate stress-testing work.

We have made significant organisational changes – in our structure, in our operating model and ways of working, and in prioritisation – for us to succeed sustainably and be match-fit for our operating environment, within the envelope of our new Funding Agreement. We are in the process of implementing a new organisational structure, making us fit for purpose and able to deliver our mandate more efficiently.

I want to acknowledge the resilience and professionalism that has been shown by our staff during this challenging period of change. The continued commitment to serving New Zealanders while navigating this period has been exceptional.

Finally, I wish to express my appreciation to the Reserve Bank Board for their continued support to the Bank’s management. 


Christian Hawkesby 
Governor 
29 September 2025