The Daily Examiner.

Adrian Orr, who had served as Governor of the Reserve Bank of New Zealand since 2018, abruptly resigned in March 2025 following a dispute over the central bank’s funding.

His departure came after disagreements with Treasury over how much funding was necessary for the bank to operate effectively.

Documents released under the Official Information Act reveal that Orr found the proposed funding to be significantly lower than he deemed viable for the organization.

The Reserve Bank had internally referred to his anticipated departure as Project Baroda, though the meaning behind the codename remains unclear.

The Reserve Bank, responsible for monetary policy and setting the official cash rate, negotiates its funding through five-year agreements between its board and the Finance Minister. Orr had initially proposed a budget of $1.08 billion, but was willing to accept a 16.5% cut, reducing the bank’s funding to $900 million and cutting around 100 jobs.

Following his resignation, Finance Minister Nicola Willis announced a further reduction, setting the bank’s operating expenses at $750 million, with $25.6 million allocated for capital expenditure.

In a February 14 email, Orr expressed concerns that the proposed funding reduction would alter the balance of risk the board had to manage in the coming years.

He emphasized the importance of operational independence for central banks, stating that such independence is judged by global financial markets, not by any current government.

A February 27 meeting between Orr, board chair Neil Quigley, Willis, and Treasury officials confirmed that the board was willing to accept a considerably lower amount than Orr had proposed.

This led to Orr’s personal decision to resign, as he felt he had achieved all he could as Governor and could not continue with significantly less funding than he believed was necessary.

Following his resignation, Orr and Quigley engaged senior counsel to negotiate an exit agreement, resulting in an immediate departure and special leave.

The Reserve Bank announced his resignation on March 5, with three years still remaining in his second five-year term.

At a media briefing, Quigley cited “personal reasons” for Orr’s departure but did not provide further details. Christian Hawkesby, the Deputy Reserve Bank Governor, was appointed acting governor immediately.

Despite speculation, the Reserve Bank clarified that debates over banks’ capital-holding requirements were not a significant factor in Orr’s resignation. Additionally, Orr did not receive a payout as part of his exit agreement.

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