Lula chooses market economist and career server for BC boards – 03/22/2023 – Market

President Luiz Inácio Lula da Silva (PT) chose Rodolfo Fróes to assume the post of director of Monetary Policy at the Central Bank and Rodrigo Monteiro to be head of the institution’s Inspection area, according to government and financial market sources heard by the Sheet.

The two names were indicated to the Chief Executive by Minister Fernando Haddad (Finance).

Fróes comes from the financial market, worked at Bank of America and was a member of the board of Banco Fator, an institution chaired by the current executive secretary of the Ministry of Finance, Gabriel Galípolo.

He arrives at the Central Bank to replace Bruno Serra Fernandes, whose mandate ended on February 28. According to the president of the BC, Roberto Campos Neto, the function demands a great deal of interaction with the financial market as it deals with foreign exchange and auctions.

Monteiro, on the other hand, is a career civil servant at BC and will assume the post currently occupied by Paulo Souza, since his mandate also expired on February 28.

“We have a part of the directors who are much more technical and linked to areas that need to have a greater continuity of management”, highlighted Campos Neto on the Inspection board in December 2022.

This Tuesday (21st), Minister Rui Costa (Casa Civil) said that Lula had already defined the names suggested by the head of the Treasury and that the formal nomination will be made after the president’s trip to China, which begins on the 25th of March and runs through April 1.

“Haddad took both names, he [Lula] talked to both, approved and will indicate both names to the Senate as soon as he returns [da China]”, said Costa, in an interview with GloboNews.

The law on the autonomy of the monetary authority, approved in 2021, determined that it is up to the President of the Republic to indicate the names of directors. Until the official announcement, Lula can review the chosen names.

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.

With the autonomy of the BC, the appointment of directors is a way for Lula to form a composition at the top of the monetary authority that is more aligned with the PT government.

Although Copom (Monetary Policy Committee) decisions are taken jointly by the eight directors and the BC president, the Monetary Policy director plays an important role in the meeting that calibrates the basic interest rate (Selic).

The high level of interest rates in the country has been the target of attacks by Lula, who has been putting pressure on the institution. This Tuesday, the president said that he will continue “hitting” and “trying to fight” so that the basic rate can be reduced. He also attacked Campos Neto again, although he did not mention him by name.