The verdict is in. Lowe is out.

The Reserve Bank of Australia (RBA) has announced that Phillip Lowe will relinquish his title of RBA Governor after a single seven-year term that ends on 17th September 2023. The RBA has appointed Deputy Governor Michele Bullock as Mr Lowe’s successor.

Mr Lowe’s 43-year career with the RBA will end on an unceremonious note, infamously for his messaging during the COVID-19 pandemic that the cash rate was expected to remain unchanged, and at a record low of 0.1%, until at least 2024.

Vying to steady an economy rocked by inflation, the RBA has raised the cash rate a consecutive 12 times to a 4.1% without a pullback – a record in its own right and one that induces what has been described as the ‘heaviest’ mortgage repayment burden in Aussie history.

The recommendation was made by Treasurer Jim Chalmers to cabinet and announced alongside Prime Minister Anthony Albanese, just before the incumbent governor is due to attend a G20 summit with Mr Chalmers in India this week.

The Treasurer observed that Ms Bullock would become the first woman to lead the RBA, labelling it a ‘historic appointment’.

A 48-year veteran at the RBA and with a masters from the London School of Economics, Ms Bullock is respected among analysts and peers alike.

“If you look at how the market has reacted post the announcement, the Aussie dollar has barely moved. That suggests to me that the market is very comfortable with her appointment,” said Tony Sycamore, Market Analyst at IG Group.

Western Australia’s Deputy Premier and Treasurer Rita Saffioti, who has heavily criticised the central bank’s ‘questionable’ rate hikes, welcomed the decision. Mr Lowe himself yielded to Ms Bullock’s appointment saying that the RBA is in ‘very good hands’ amid the current inflationary challenge.

Treasurer Chalmers also touted the Deputy Governor as best suited to steer the RBA through its biggest reorganisation in decades aimed at changing to how the central bank formulates and announces interest rate decisions, including fewer but longer meetings.

“It is a challenging time to be coming into this role, but I will be supported by a strong executive team and boards,” Bullock said in a statement.

Mr Lowe is due to chair his final two policy meetings in August and September this year and has hinted at the possibility of Australia seeing further rate rises rates bring inflation down to its target range of 2-3%.

Past performance is not a reliable indicator of future performance.