Brash quits as N.Z. central bank chief

By Geoff Hiscock
CNN Asia Business Editor

WELLINGTON, New Zealand (CNN) -- New Zealand's central bank governor Don Brash resigned Friday to move into politics.

Brash said he had been invited to seek nomination for the opposition National Party as a candidate in the upcoming general election.

"I have decided to accept that invitation. I wish to stress that this decision is not motivated by any tension with the minister of finance (Michael Cullen) or the government," he said.

Cullen is deputy leader of the Labour Party, the senior partner in the Labour/Alliance coalition government led by Prime Minister Helen Clark.

Brash, who became Reserve Bank governor in September 1988, stood unsuccessfully for the National Party in 1980 and 1981.

He will step down immediately, with deputy governor Rodd Carr moving into the bank's top spot for now.

Lifted interest rates

Brash has been a strong advocate of keeping the lid on inflation in New Zealand, where business and consumer confidence has bounced back in recent months.

Brash surprised money markets by lifting interest rates a quarter of a percentage point on March 20, making New Zealand the first country in the region to tighten rates since the September 11 terror attacks in the United States.

Brash acted again on April 17, raising the official cash rate from 5 percent to 5.25 percent.

Brash said working at the bank had been a "great privilege" but he now sought to serve New Zealand in another way.

In early trade Friday, the New Zealand dollar was steady against the U.S. currency, trading at 44.98 to 45.03 U.S. cents. On the stock market, the benchmark NZSE Top 40 was down 2.09 points or 0.1 percent to 2042.23.