Galipolo Selected to Lead Brazil’s Central Bank as Heterodox Economist

By Marcela Ayres

Gabriel Galipolo, a 42-year-old economist, has been nominated to become the next head of Brazil’s central bank. His appointment by President Luiz Inacio Lula da Silva was confirmed by Finance Minister Fernando Haddad. If the Senate approves his nomination, he will replace Roberto Campos Neto when his term ends in December.

Galipolo currently serves as the bank’s director of monetary policy and has previously held the position of deputy at the Finance Ministry. His arrival at the central bank in July last year, appointed by Lula, initially raised concerns in the market due to perceived doubts about his technical expertise and non-traditional views, which included advocating for state intervention to meet social needs and suggesting a broader role for the central bank in managing interest rates.

Despite these initial concerns, perceptions of Galipolo have improved, and he is now viewed by many as a strong candidate to succeed Campos Neto, largely due to his positive rapport with Lula. The president has characterized Galipolo as a "golden boy," praising his capabilities and integrity.

Lula has expressed ongoing frustration with Campos Neto and the high benchmark interest rate, which currently stands at 10.5%. However, Lula’s tone appears to have softened, recently stating that if policymakers decide to raise interest rates, they should proceed with that action.

This shift in sentiment has corresponded with Galipolo’s statements at a recent monetary policy meeting, where he acknowledged the possibility of a rate hike due to persistent inflation risks. His remarks reassured investors who were concerned that Lula’s appointees might lead to a more lenient approach toward inflation next year.

An anonymous market participant noted Galipolo’s "persuasive ability" with the president, while another observer highlighted Galipolo’s rapid adaptation to the central bank’s largely technical position.

Galipolo was introduced to Lula in 2021 by Luiz Gonzaga Belluzzo, a renowned economics professor and Lula adviser. The two economists co-authored a book that criticized multinational corporations for capitalizing on interest rate and currency differentials by borrowing at lower rates abroad and investing in higher-yielding Brazilian assets.

As the director of monetary policy, Galipolo has not altered the central bank’s exchange rate strategies despite the Brazilian real’s more than 12% decline against the U.S. dollar this year; he has refrained from intervening in the currency market.

Galipolo holds a master’s degree in political economy from the Pontifical Catholic University of Sao Paulo. His experience includes serving as an economic adviser to the São Paulo state government, leading Banco Fator as CEO, and founding a consultancy focused on public-private partnerships.

In his role at the Finance Ministry, he earned respect in Congress through his listening skills and negotiation abilities, helping secure significant legislative victories, including the approval of a new public accounts framework.

Senator Vanderlan Cardoso, chair of the Senate’s Economic Affairs Committee, remarked on Galipolo’s qualifications, stating, "He’s a good choice; he’s already been vetted here, everything’s fine, people liked him." His nomination awaits confirmation from the committee before it goes to the full Senate for approval.