ASIA CENTRAL BANKS SET FOR LEADERSHIP RESHUFFLE

China, New Zealand, Japan, Indonesia, South Korea, Taiwan poised to change or reappoint governors

BEIJING/HONG KONG/TOKYO/JAKARTA

ASIA’S biggest economies are set to change or reappoint their central bank chiefs in the coming months, in what is shaping up as a shift in personnel rather than policy.

China, Japan, South Korea, Indonesia, Taiwan and New Zealand are all poised to announce new leadership or reappoint their exiting heads. They form part of the regional export powerhouse that is forecast by the International Monetary Fund to make up almost two thirds of global growth this year.

The backdrop: Change atop the United States Federal Reserve and a world inching toward tighter monetary policy. That trend could land in Asia soon, with South Korea forecast by some economists to raise benchmark interest rates as soon as next week.

Yet the overarching policy outlook in Asia isn’t tipped to change along with its personalities.

China’s next central bank chief will have to take instruction from the nation’s cabinet, which is intent on keeping cash flowing to the real economy even as it tightens the screws on riskier lending.

In Japan, Haruhiko Kuroda is seen as likely to stay in his post, and even if he were to opt for retirement, few expect a hawk would take over.

“Policy continuity will likely be the overriding factor in selecting the new northeast Asian central bank leadership,” said IHS Markit Asia-Pacific chief economist Rajiv Biswas.

In office since 2002, People’s Bank of China Governor Zhou Xiaochuan is the longest serving central bank governor in the Group of 20 economies. He has recently signalled publicly that he may depart “soon”.

Kuroda was appointed in March 2013 and his five-year term ends in April next year. If appointed for a second term, that would be a first since 1956. At the same time, the terms of two Bank of Japan deputies also come up in March, meaning even if Kuroda stays there’s scope for a reshuffle.

Bank of Korea governor Lee Juyeol’s four-year term ends on March 31 next year. While the law allows the governor to serve a second term, nobody has done so since the 1970s. Since June, the Bank of Korea has signalled the next policy change would be a hike, which analysts say could come this month after positive growth and inflation figures.

For the first time in two decades, Taiwan is searching for a new central bank governor. Deputy Yang Chin-long is the leading contender to succeed Perng Fai-nan after his term ends in February, according to a recent survey of economists by Bloomberg.

Bank of Indonesia governor Agus Martowardojo’s five-year term ends in May. Agus has managed to boost the central bank’s reputation through a greater level of communication with the market — a vital reform considering he has overseen eight rate cuts since the beginning of last year. A governor can have a maximum two terms.

At the Reserve Bank of New Zealand (RBNZ), a successor to Graeme Wheeler is due to be appointed, with the incoming governor set to take over from caretaker Grant Spencer in March. The new Labour-led government wants to shake up the RBNZ’s mandate by adding employment to its existing focus on inflation. A non-voting Treasury official would also attend meetings. Bloomberg