RBA deputy governor Debelle to step down unexpectedly

Bloomberg

Reserve Bank of Australia (RBA) No. 2 Guy Debelle is stepping down from his position in an unexpected move that sees the departure of a potential future governor from the central bank.
Debelle, who sits on the RBA’s policy-setting board, will join Fortescue Future Industries, a clean energy arm of iron ore miner Fortescue Metals Group, as chief financial officer in June. The deputy governor will leave the RBA effective March 16.
The surprise move comes as the central bank struggles to push against aggressive market bets for rate increases in response to soaring commodity prices. Debelle, along with Governor Philip Lowe, has played a key role in RBA messaging as it tries to stick with a more cautious stance on raising borrowing costs than its global peers.
The departure is unlikely to have monetary policy implications for RBA, which has left its benchmark rate at a record low 0.1% since November 2020. Governor Philip Lowe said a hike this year was “plausible” as central bank shifts its position in response to soaring inflation.
Unlike the US Federal Reserve, where voting board members express their views on economy and policy, at the RBA only the governor and his deputy make public announcements on the monetary policy matters.
Debelle’s departure raises the question of who will replace Lowe when his term ends in September 2023. Debelle had looked well-placed as a leading candidate to take over, and his exit increases likelihood that Lowe’s term will be extended, according to Josh Williamson, chief economist for Australia and New Zealand at Citigroup.
“An 18-month period for the new deputy governor might not be considered enough to move up to governor,” said Williamson, citing RBA’s recent history where governors have served around five years as deputies
before being promoted.
Debelle is part of a regulatory climate change working group and has held roles at the IMF and Bank for International
Settlements.
, he said the new position gives him the opportunity to make a “significant contribution” to help address climate change.

Fortescue Future Industries, controlled by billionaire Andrew Forrest, says it is committed to producing zero-carbon green hydrogen from 100% renewable sources, and that Debelle’s appointment will help its goal of producing 15 million tonnes per year by 2030.
Debelle is part of a regulatory climate change working group and has held roles at the International Monetary Fund and Bank for International Settlements. In a statement, he said the new position gives him the opportunity to make a “significant contribution” to help address climate change.
“Australia has been an energy exporter for many decades. And there is no reason why this should change,” said Debelle, who started at the RBA in 1994. “Australia is also endowed with resources that have the potential for us to continue to be an exporter of energy –- but renewable rather than emissions-intensive fossil fuels.”
Treasurer Josh Frydenberg said in a statement that the government will announce Debelle’s replacement in “due course.”