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(Bloomberg) — Australia appointed Renee Fry-McKibbin, who participated in the review of the central bank, and former Bendigo and Adelaide Bank CEO Marnie Baker to the Reserve Bank’s new monetary policy committee.

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Treasurer Jim Chalmers made the announcement on Monday following the passage last month of legislation to split the RBA’s board into two entities. Governor Michele Bullock, Deputy Andrew Hauser and Treasury Secretary Steven Kennedy will stay on the rate-setting body as will current members Carolyn Hewson, Ian Harper, Iain Ross and Alison Watkins.

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Fellow members Carol Schwartz and Elana Rubin have agreed to shift to the RBA’s new governance board, Chalmers said, and will be joined by new appointees Jennifer Westacott, David Thodey, Danny Gilbert and Swati Dave.

“This means the majority of positions on both boards will be held by women,” Chalmers said in a statement. “These appointments will ensure continuity on both boards, consistent with the preference of the RBA governor.”

The new boards are scheduled to begin from March 1, 2025. 

Bullock said earlier this month she will discuss whether to publish unattributed votes from policy meetings and have members deliver speeches with the new rate-setting board.

The governor, in a statement on Monday, welcomed the appointments to the governance and monetary policy boards. Baker and Fry-McKibbin’s “expertise and insights will be vital as we continue our efforts to bring inflation back to target,” she said.

Economists have flagged that changes to the composition of the monetary policy committee would raise uncertainty over the future path of rates. The RBA on Tuesday left its cash rate at 4.35%, marking more than a year at that level. Some economists see a first cut in February while others predict May as a more likely option. 

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Overnight-indexed swaps imply a 50-50 chance of a February cut with a reduction fully priced only in May.

Su-Lin Ong, chief economist for Australia at Royal Bank of Canada, said the two new monetary policy board members are “largely unknown to markets and most investors,” let alone any sense of where they lie on the hawk-dove spectrum.

“The new board and its operation will add some uncertainty to the RBA’s reaction function in 2025 at a time where a change in the policy stance is expected and there is already uncertainty over the timing and magnitude of a likely easing cycle,” she said. “It will take time to assess the new members as well as the four that have transferred over with all members of the new board expected to deliver at least one public address/appearance per year.”

The RBA legislation to split the board follows an independent review of the central bank that called for wholesale changes to its operations. Some of these were enacted this year including fewer policy meetings and regular press conferences by the governor. 

The new members of the monetary policy committee are:

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• Renee Fry-McKibbin,  a professor of economics at the Australian National University who in 2022-2023 was one of three panelists who conducted the independent review of the RBA. Fry-McKibbin has been a visiting scholar at the European Central Bank, the Atlanta Federal Reserve and the Bank of England. She has been appointed for a five-year term.
• Marnie Baker has 35 years’ experience in the financial services sector. She recently served as chief executive officer of Bendigo and Adelaide Bank and has been appointed for a five-year term.

The new members of the governance board are:

• Jennifer Westacott was chief executive of the Business Council of Australia for over a decade. She is currently the Chancellor of Western Sydney University and has been appointed for a five-year term.
• David Thodey has more than 30 years of experience including six years as Telstra CEO and 22 years at IBM Australia. He is currently the Chair of Xero and the Chancellor of the University of Sydney. He has been appointed for a four-and-a-half-year term
• Danny Gilbert is co-founder and chair of Gilbert+Tobin, one of Australia’s leading corporate law firms. He has board experience, including at NAB, the Business Council of Australia and as Chair of the National Museum of Australia. He has been appointed for a five-year term.
• Swati Dave served as the managing director and CEO of Export Finance Australia from 2017 to 2022. She is the chair of the Advisory Board to the Centre for Australia-India Relations and has been appointed for a four-and-a-half-year term.

“The appointments are all about modernizing the RBA to help ensure it can continue to meet our current and future economic challenges,” Chalmers said.

(Adds comment from governor, economist’s reaction.)

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