Economy

Brazil’s Lula to Appoint Picchetti and Teixeira to Central Bank Board, Reports Reuters

Brazil’s Finance Minister Announces New Central Bank Appointments

BRASILIA – On Monday, Brazil’s Finance Minister Fernando Haddad announced that President Luiz Inacio Lula da Silva intends to appoint Paulo Picchetti as the new director of international affairs at the central bank, and Rodrigo Alves Teixeira as the director of institutional relations.

These nominations will need Senate approval before the new directors can assume their roles, replacing the current directors, Fernanda Guardado and Mauricio Moura, whose terms conclude at the end of December.

With these appointments, Lula, who began his term in January with a critical stance toward the central bank’s monetary policy, will have four of his candidates on its nine-member board.

Government insiders indicated that Lula is acting quickly to finalize these nominations, ensuring the new directors can participate in the first policy decision of 2024.

Picchetti, a professor at Fundacao Getulio Vargas, is viewed positively in the market and is seen as a close collaborator of Haddad. He holds a master’s degree in economics from the University of Sao Paulo and a doctorate from the University of Illinois. According to Felipe Salto, chief economist at Warren Rena, "Picchetti’s appointment to the central bank is very positive. He is an extremely respected academic with extensive experience in inflation and price indexes."

Teixeira is a career civil servant at the central bank. He also holds a degree in economics and both a master’s and Ph.D. from the University of Sao Paulo. During Haddad’s tenure as mayor, he held two positions in the Sao Paulo city government.

Analysts are closely watching these central bank nominations, as the increasing influence of Lula’s appointees may lead to a more flexible approach to combating inflation. Policymakers have recognized that this perception could pose challenges in aligning inflation expectations with the official target.

The central bank initiated an easing cycle in August after maintaining its benchmark interest rate at a high for nearly a year to manage inflation. To date, interest rates have been reduced by 100 basis points to 12.75%, with intentions signaled for further 50 basis-point cuts in upcoming meetings.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker