Brazil Top Court Upholds Law Granting Central Bank Autonomy
(Bloomberg) -- A majority of Brazil’s Supreme Court justices have voted to uphold the constitutionality of a law granting the central bank formal autonomy, a key piece of legislation considered by investors as a victory for monetary policy making in Latin America’s largest economy.
Eight justices voted in support of the law on Thursday, and two against.
“Countries with an independent central bank have a good experience with it,” Chief Justice Luiz Fux said during an event hosted by XP Investimentos earlier on Thursday, adding that he sees the autonomy given to Brazil’s policy makers as a great advance.
At issue in the case is a procedural question of whether the bill should have been introduced by the president as it was, rather than by legislators. But the timing of the court’s deliberation is delicate.
President Jair Bolsonaro is growing increasingly agitated over steep price increases that are contributing to a steady drop in his popularity, which has never been lower. Behind closed doors, he’s also expressed his deep displeasure about remarks made by central bank chief Roberto Campos Neto, linking an increase in inflation expectations to political infighting.
Political noise has been growing more than a year ahead of Brazil’s general elections as Bolsonaro clashes with electoral authorities and the top court over his unsubstantiated claims of fraud in the country’s electronic voting system.
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