Orr was unanimously recommended by the Reserve Bank Board, according to the Minister of Finance Grant Robertson.
Robertson said the Reserve Bank had been undergoing a lot of change during Orr's tenure.
“As the governor, Orr has been instrumental in leading this change and his reappointment will allow him to carry on and ensure these changes are bedded in,” Robertson said.
“In light of global conditions, this is also a time when stability and continuity are paramount for the bank.”
Robertson also praised Orr's handling of the pandemic.
The new regime administered by Orr required the bank to consider full employment as well as inflation. A further task was to protect and promote the stability of New Zealand’s financial system.
Under that last principle, the bank expanded its role to look at climate change and even to consider economic inequality. It also expanded its concern with Te Ao Maori.
The National Party has condemned Orr's re-appointment.
Finance spokesperson Nicola Willis said she was appalled a decision was made to re-appoint him without first completing an independent review of the bank’s actions during the pandemic.
“We have repeatedly urged the Government to conduct an independent review of the Reserve Bank’s performance before endorsing the governor for another five years,” Willis said.
“Re-appointing him without first completing such an inquiry is a serious mistake.”
In criticising this decision, Willis slated the cheap money created by the Reserve Bank to help fight Covid as a source of serious housing inflation and record bank profits.
Massey University banking expert David Tripe said he was surprised that there had been no cross party support for re-appointing the governor, since his position was non-political and could potentially span different administrations.
Tripe added Orr was not always receptive to the advice of other people, and this was reflected in the departure of many senior staffers in the last year or two.
“There have also been some policy mistakes made, some of them excusable, others less so,” Tripe added.
He cited persistence with the Funding For Lending programme and relaxation of LVR rules, both of which have been blamed for high housing inflation.
Financial Services Council (FSC) chief executive Richard Klipin said he welcomed Orr’s reappointment.
“The FSC has worked closely with the RBNZ over the past few years and they have a critical role to play in the stability and confidence of the financial system,” Klipin said.
“The past three years have been an incredibly difficult time for the country, our people and our businesses."
Orr became Governor of the RBNZ in 2018. He had earlier worked as an independent and bank economist, and at Treasury, and also served a stint as Deputy Governor of the Reserve Bank. He then worked as chief executive of the NZ Super Fund.