BC: Haddad is considering appointing Galípolo to the board – 05/04/2023 – Market

Amidst the dissatisfaction of the Luiz Inácio Lula da Silva (PT) government with the Central Bank’s performance in conducting interest rate policy, Minister Fernando Haddad (Finance) is considering appointing the executive secretary of the economic portfolio, Gabriel Galípolo, to one of the vacancies on the board of the monetary authority.

The choice would leave open the possibility of Galípolo in the future taking the place of the current BC president, Roberto Campos Neto, whose term ends in December 2024.

Even if he is not nominated now, there is a possibility that his name will be presented to Congress in December 2023, when two new board seats will become vacant.

Galípolo is one of Haddad’s closest assistants and was already heard by Lula on economic issues since the pre-election campaign period.

One of his first appearances took place alongside PT president Gleisi Hoffmann, who took him to a dinner with businessmen in April 2022. On the occasion, his speech in defense of dialogue between the government and the market was well received.

Today, Galípolo helps conduct all the strategic discussions at the Ministry of Finance and was directly involved in the preparation of the new fiscal framework and in the packages of measures to rebalance the public accounts.

The first announcement of measures, still in January, was classified by Haddad as a “letter to the Central Bank”. The economic team expects that the proposals in the fiscal area will make room for the BC to cut the interest rate – currently set at 13.75% per annum.

This Thursday (4th), Lula returned to criticize the way interest rates are discussed in Brazil and sent a new message to Campos Neto. The Chief Executive said that “everyone here can talk about everything, they just can’t talk about interest”. “As if one man alone could know more than the heads of 220 million people,” he added.

Without having participated in the discussions, the current president of the BC publicly defended that the chosen futures have technical knowledge for the positions they will occupy and that a smooth transition be made, although he reiterated that the nomination is a prerogative of Lula.

According to the BC autonomy law, approved in 2021, it is up to the President of the Republic to indicate the names of directors. Subsequently, the nominees undergo a sabbatical at the CAE (Economic Affairs Commission) of the Federal Senate. The names are then taken to the plenary for approval.

Last Tuesday (2), Haddad said that the definition of the names chosen for the monetary authority should come out this week. There are currently two vacancies open on the BC’s board of directors, in the areas of Monetary Policy and Oversight.

For the first of them, the government even quoted in March the name of Rodolfo Fróes. However, the early exposure of the administrator’s name, who worked at Bank of America, was a partner of the Americanas trio and member of the board of Banco Fator, made the government reconsider the choice.

The chair on the Monetary Policy board has been vacant since the departure of Bruno Serra Fernandes, on March 27, almost a month after the end of his term.