LatinNews Daily - 09 May 2023

In brief: Brazil deputy minister named for central bank role

* Brazil’s finance ministry has announced that the deputy finance minister, Gabriel Galípolo, has been nominated to be the director of monetary policy on the board of the central bank (BCB). Finance Minister Fernando Haddad has expressed his hope that the appointment of his second-in-command to a key BCB post would lead to “greater coordination of fiscal and monetary policies.” If the federal senate approves his nomination, Galípolo will have a role in deciding the benchmark interest rate, currently maintained at 13.75% for the sixth consecutive month, which Brazil’s government has repeatedly called for the central bank to lower. The tensions between the government and the autonomous BCB are expected to continue, as the central bank had stated that it would not lower the benchmark interest rate until the deflationary process has “consolidated.” However, having a senior finance ministry official installed in the board would be a major boost to the government, as Galípolo could be a loyal ally capable of exerting influence on the committee to push the agenda of Haddad and President Luiz Inácio Lula da Silva.

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