Target of criticism from Lula, Campos Neto defends bringing forward the choice of BC president

The president of the Central Bank, Roberto Campos Neto, defended this Wednesday (3) that the process of succession of the authority’s command begins before the end of his term, on December 31st. He stated that the government should nominate the next president of the BC between October and November to hold a hearing in Congress before the year-end recess.

Campos Neto was constantly attacked by President Luiz Inácio Lula da Silva (PT) over the past year, due to the delay in the Monetary Policy Committee (Copom) starting to reduce the basic interest rate. Even after a trajectory of cuts that reached 10.75% last month, he continued to be in the sights of PT members – especially the party’s national president, Gleisi Hoffmann.

“It would be good to do the hearing this year. If a director is interim president, he has to go through a hearing as well”, highlighted Campos Neto. However, the BC autonomy law does not specify the procedures for the succession process.

Furthermore, the current president of the BC emphasized the importance of a smooth transition between governments, avoiding the politicization of the process. He himself was accused by the Lula government of acting following the instructions of former president Jair Bolsonaro (PL), who appointed him to the position.

“This thing where you change from one government to another, where the government that comes in speaks bad about the other and we have a transition that is not civilized, it’s very bad. I always say that I prefer to discuss ideas than people. So, In this sense, I will make the transition as smooth as possible”, he stated.

There is speculation that the next president of the BC will be Gabriel Galípolo, the authority’s current director of monetary policy and considered close to Lula. The indication, however, raises uncertainty in part of the financial market regarding the trajectory of the Selic rate. While Lula criticizes Campos Neto for keeping interest rates high, the BC justifies the measure as necessary to contain inflation.

Despite speculation that Galípolo could be Lula’s nominee for president of the Central Bank, Minister Rui Costa, from the Civil House, disagreed and said that there is still no name defined.

“It is an extraordinary, competent technical team, but the decision will be made at the appropriate time by the President of the Republic who, at the end of the year, which is the moment he has to indicate, he will do so”, stated the minister in an interview with GloboNews earlier.

Campos Neto also advised the successor who takes over the presidency of the monetary authority, stating that “the most important thing for whoever sits in the chair today is to have the firmness to say no when necessary. And it will always be necessary, at some point, because the cycles are different, the desires will be different, the understandings about what is good will be different. So it’s important to be firm enough to say no and explain it to the inside and outside.”

He also noted that the risk perception of the financial market in relation to the change in BC command has decreased, attributing this to the unanimity in the latest decisions of the Monetary Policy Committee (Copom) on the Selic cut, currently at 10.75% per year.

In addition to the change in presidency, the government will also appoint two more directors, which will result in a majority of the Copom.