Brazil’s President Luiz Inácio Lula da Silva said his eventual picks for two openings on the central bank’s board of directors would align with “the interests of the government,” a position that may heighten concerns among investors who want experienced monetary policy voices to fill the roles.
“The new directors will be appointed according to the government’s interests,” Lula told journalists at the presidential palace on Thursday. “It’s important to know that we’re going to appoint people in line with the interests of the government, and people of the highest responsibility, because we’re not going to play with the economy.”
Lawmakers and investors are awaiting Lula’s picks to serve as the bank’s directors of monetary policy and supervision, two positions with votes on its board. The openings have drawn increased attention amid the leftist leader’s battles with the central bank over its decision to hold interest rates at a six-year high.
The president has the power to fill the vacancies, but the Senate must approve his appointees.
Finance Minister Fernando Haddad has suggested candidates for the positions to Lula. In an interview with Bloomberg News this week, Haddad said “it would be a mistake” to base the picks solely on their support for the government.
“The best option is to invite people who have technical capacity, study monetary policy and have a contribution to make,” he said.
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Lula has criticized current monetary policy throughout his presidency, asserting that high interest rates are hindering economic growth. He re-upped that critique Thursday, calling Brazil’s 13.75% benchmark Selic rate “incomprehensible” and a barrier to businesses that want to borrow. He also argued that the central bank’s inflation targets should be changed if it is not feasible to meet them.
“If the target is wrong, the target is changed,” he said.
Central bank chief Roberto Campos Neto, the subject of much of Lula’s criticism, said Wednesday that decisions on how to fill the roles are ultimately up to the president.
“It is the prerogative of the government to choose directors,” Campos Neto said at an event in Sao Paulo. “We are not worried about whether the director thinks from the left, center or right. We are concerned about the technical aspect of the work.”
Source: Yahoo! News