Galípolo seeks vacancy in BC on tour from PT to PL – 06/15/2023 – Market

Nominated by President Luiz Inácio Lula da Silva (PT) to occupy a chair on the board of the Central Bank, Gabriel Galípolo dedicated part of the last few days to a pilgrimage to dinner parties and senators’ offices to attract the support of those who need to approve his name for the post .

Today executive secretary of the Ministry of Finance, the economist made no distinction between party colors and included in his script of conversations from senators from the base of the government to members of the PL of former president Jair Bolsonaro.

Galípolo already had an important role in Brasília’s political circles, participating in the negotiation of important measures such as the new fiscal framework. He has taken with him Ailton Aquino, a career BC official who was nominated for the second vacancy available in the autarchy’s management and a lesser-known name among parliamentarians.

In the meetings, according to reports gathered by the SheetGalípolo has shown ease when talking about arid topics such as inflation, interest rates and international reserves —issues that guide the day-to-day activities of the monetary authority.

In different dialogues, the current secretary detailed the concepts, outlined an overview of price indices and the basic interest rate (Selic), in recent years and for the future. He also explained in depth how Brazil built up its international reserves (today at US$343.4 billion), seen as an important cushion against external shocks.

He also heard several complaints from senators about the current level of interest, considered high. The tone echoes the government’s own criticism of the conduct of monetary policy, which maintains the Selic rate at 13.75% per annum.

The discussion on the inflation target, which is closely monitored by the financial market in view of the possibility of change, was left out of the debates with the senators, according to reports. Neither the secretary nor the senators mentioned the subject in the conversations.

According to interlocutors, Galípolo has also sought to stick to BC issues, speaking as a candidate for the board, although he is now a government agent active in the most far-reaching measures so far in the administration of Minister Fernando Haddad (Finance).

On fiscal policy, he sums up his position to the need for “harmonization” between it and monetary policy —a speech that was often chanted by the Minister of Finance.

According to reports, despite the good dose of economese, Galípolo has made a good impression on senators for his willingness to dialogue and also for his technical knowledge in the area.

Aquino was also praised by two senators interviewed by the Sheet and who said they didn’t know him until the meeting.

On Tuesday (13) night, there was a dinner attended by names from both the base and the opposition, such as the leader of the government in Congress, Randolfe Rodrigues (without party), Weverton (PDT-MA), Mecias de Jesus ( Republicanos-RR) and Chico Rodrigues — who, despite being from the PSB in Roraima, was deputy leader of the Bolsonaro government.

He and Aquino also met with the PT bench in the Senate and with Senator Eduardo Gomes (PL-TO).

The duo also accompanied Haddad and Simone Tebet (Planning) at the meeting of leaders attended by the president of the House, Rodrigo Pacheco (PSD-MG), this Thursday morning (15), an agenda in which the two ministers dedicated themselves to debating the new fiscal framework.

“[A] interest rate policy needs to be urgently revised. Obviously we needed to talk more and understand what you are imagining [sobre esse tema]”, said Senator Weverton.

According to the parliamentarian, the two said that they were starting the journey between the senators and that they foresee that both will be approved by the House.

“I have no doubt that they will have the large majority of votes needed in the Senate,” he added.

The nomination of Galípolo and Aquino first needs to go through the CAE (Economic Affairs Commission) of the Senate. The session is scheduled for the next 27th. If approved, the names will go to the plenary.

Galípolo and Aquino repeat what is already a tradition in the nomination process, with a saga through parliamentary offices to convince them to vote in their favor.

The duo seeks to confirm their vacancies in the direction of BC at a time when the autarchy has been the target of attacks by the government due to the level of interest rates.

Lula himself has publicly exchanged barbs with the president of the institution, Roberto Campos Neto, on more than one occasion, and has also speculated about withdrawing the bank’s autonomy, giving the executive more power of interference.

Haddad’s right-hand man, Galípolo is seen as a man the government can trust to be able to influence the body’s direction in decisions on interest rates.

Until the end of Campos Neto’s term, in 2024, Lula will still be able to appoint two more directors and Galípolo is even quoted to replace the bank’s president.