Lula’s Nominee to Lead Brazil’s Central Bank Stresses Independence in Decision Making, According to Reuters

By Marcela Ayres

BRASILIA – Brazil’s President Luiz Inacio Lula da Silva has nominated Gabriel Galipolo to lead the central bank starting next year. Galipolo affirmed on Tuesday that the president has made it clear that he will have the freedom to make independent decisions.

Speaking during a Senate economic affairs committee hearing, where his nomination will soon be voted on, Galipolo stated that his primary focus as central bank chief will be the interests and welfare of all Brazilians. He noted that the central bank is resolute in aiming for a 3% inflation target.

Galipolo reported that the annual core inflation rate in Brazil, the largest economy in Latin America, is comparable to those in more stable countries like the United States and the United Kingdom.

Identified as a heterodox economist and closely aligned with Lula—having recently accompanied him on a trip to Mexico for President Claudia Sheinbaum’s inauguration—Galipolo has been serving as the central bank’s monetary policy director since July of the previous year.

His initial nomination raised concerns among market participants, who questioned his technical expertise and his advocacy for state intervention to address social needs, as well as his view that the central bank could influence the entire yield curve.

Despite the skepticism, he has managed to garner support to succeed Roberto Campos Neto, the current governor appointed by former right-wing President Jair Bolsonaro, who has faced significant criticism from Lula since the latter took office in January 2023.

Last month, Galipolo, along with the rate-setting committee known as Copom, initiated a tightening cycle by raising interest rates by 25 basis points to 10.75%.

Prior to this decision, with his nomination already public, Lula remarked that if policymakers deem it necessary to increase interest rates, they should proceed with such adjustments. This comment was interpreted as a potential shift from Lula’s ongoing calls for lower borrowing costs to bolster the economy and promote investment.