Bolsonaro to Back Central Bank Independence, Estado Says
(Bloomberg) -- Brazil presidential front-runner Jair Bolsonaro plans to propose formal central bank independence as part of a series of "high impact" economic plans if he wins the Oct. 28 runoff vote, newspaper Estado de S. Paulo reported on Saturday without saying how it obtained the information.
Bolsonaro’s team would signal intentions to start negotiating economic reforms during the transition period from the current administration. While Bolsonaro’s team has indicated it would like to keep Ilan Goldfajn as the head of the monetary authority, former central bank director Luiz Fernando Figueiredo is being considered if that option isn’t possible, Estado de S. Paulo reported.
Investors in Latin America’s largest economy are increasingly focusing on Bolsonaro’s economic proposals given his commanding lead in all polls for the runoff. The future of Brazil’s central bank was thrust into the spotlight this week after Bloomberg reported that Goldfajn, who has won praise for taming inflation and lowering borrowing costs, is prepared to exit the institution by the end of this year.
Under current law, any of the bank’s nine directors, including its governor, can be fired by the president at any time. Enshrining the central bank’s formal independence into law would make it less susceptible to political interference and boost confidence among investors.
Figueiredo said he has been in talks with Bolsonaro’s top adviser Paulo Guedes about "economic guidelines" but has not received any formal invitation, Estado de S. Paulo reported. Figueiredo added that it would be good for the country if Goldfajn remained at the helm of the central bank.
Bolsonaro told reporters in Rio de Janeiro later on Saturday that he didn’t rule out the possibility of Goldfajn remaining as central bank president.
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