The possibility that we may see a new Reserve Bank Governor before we see another move in the official cash rate could be the biggest variable on the monetary policy horizon this year.

Governor Graeme Wheeler's term ends in September and it is not yet clear whether he will stand again.

Last week Finance Minister Steven Joyce suggested an announcement on Wheeler's future was imminent.

In his Monetary Policy Statement preview, Westpac chief economist Michael Gordon highlights uncertainty over the Governor's future as one of the most notable risks around monetary policy this year. The other risk being the general election.

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"If Wheeler steps down, the RBNZ Board is likely to make an appointment around June or July. And regardless of whether there's a change of Governor, a new Policy Targets Agreement will have to be negotiated with the Finance Minister before the next term begins," Gordon writes.

"To complicate things, the election will be held on 23 September, just days before the Governor's term begins. If the election results in a change of government, it's possible that the PTA could be renegotiated a second time this year."

These uncertainties around the Reserve Bank's direction make the market's degree of confidence about an OCR hike this year misplaced, he concludes.