Australian Treasurer Jim Chalmers expects to decide in July on the governor of the Reserve Bank, with incumbent Philip Lowe’s current term expiring in less than three months. Whether Lowe is extended or replaced, the next head of the central bank will face myriad challenges.

The RBA is undertaking its most aggressive policy tightening in more than 30 years and this month raised the cash rate to 4.1%, while warning of possible further hikes ahead. That’s fueled anger among borrowers and required Lowe to resist calls to pause during testimony with lawmakers.

The next governor will inherit still elevated inflation and also face the biggest reform of the central bank in decades following a review. Taking charge of that while parrying criticism during a tightening cycle and familiarizing themselves with the institution would be a significant task for an outsider.

The RBA governor must be “a person of credibility, a person with experience, and a person able to take the Reserve Bank forward,” Chalmers said on Australian Broadcasting Corp. radio Thursday. They need “to be well placed to implement the recommendations of the review.”

The treasurer rejected suggestions that Lowe wouldn’t meet the criteria for overseeing the review. “I have very high regard for Phil Lowe. And he’s got a difficult job to do and he’s doing it.”

The following candidates have been suggested as potential successors to Lowe. The governor himself could also be extended when his current seven-year term expires in September, with his two predecessors receiving an extra three years to give them 10 at the helm.

• Deputy Governor Michele Bullock would be an easy replacement given the No. 2 official has in recent times taken over from the outgoing governor. She would be the first woman to lead the RBA. While Bullock is highly regarded, her handicap is she has only been in the role 15 months and may not be seen as ready to lead yet
• Department of Finance Secretary Jenny Wilkinson, who worked at the RBA and the Treasury, is also often mentioned. But she is also seen as being in line to become the first female head of Treasury
• Other senior economists suggested include Chief Statistician David Gruen, former Treasury Secretary Martin Parkinson, who served on the RBA’s board, and current Treasury Secretary Steven Kennedy
• Another possibility would be former Deputy Governor Guy Debelle, who quit the RBA in March last year to work with Fortescue Future Industries. He’s repeatedly declined to comment when asked
• The limited time available for Chalmers to make a decision makes it difficult to see an international candidate being drafted in

Still, Chalmers has previously said that “all options are on the table.” The next governor, as part of implementing the recommendations of the RBA review, will need to set up a new monetary-policy committee for rate decisions.

The treasurer says he’s consulting with Cabinet colleagues and others and aims to make an announcement on the governor next month or at the latest by the time parliament returns. It heads into a short winter recess at the end of Thursday and will resume on July 31.

“This is a big job and it’s a big call,” Chalmers said of the RBA governor on the ABC. “It’s a key institution and obviously makes decisions which matter a great deal to the living standards of the Australian people, and that’s why we don’t take decisions like this lightly.”

Lowe has become a lightning rod for discontent as the RBA raised rates by 4 percentage points in little over a year to tackle inflation. But Lowe has also made errors that triggered a backlash among politicians and the public.

Key among these was hanging on to early-pandemic guidance that rates were unlikely to rise before 2024, a line he persisted with until late-2021. Instead, the RBA began lifting borrowing costs in May 2022.

While central bank governors are typically unpopular during tightening cycles, Lowe has faced unprecedented scrutiny and vitriol, with a television camera parked outside his home 24 hours a day and politicians taking any opportunity to criticize him.

The governor’s difficulty, like many of his global counterparts, is that inflation is proving sticky and he can’t guide on when tightening will end. He has warned further increases may be required to tame inflation. Economists see two more hikes this year for a terminal rate of 4.6%.

(Updates with details on potential candidates and obstacles ahead.)