Joao Pessoa

Simply the Best Site about João Pessoa

Paraíba Paradise

Sponsored Links

Le Petit Paradis Pousada in Joao Pessoa

Family run Guest House in a quiet residential street and close to local amenities

Debate grows over future of Brazil cenbank chief

January 19th, 2010

Henrique Meirelles

Speculation is intensifying over the political future of Henrique Meirelles, Brazil’s central bank chief, as October’s general elections draw closer, raising concerns over the continuity of monetary policy.

Brazil’s longest-serving central bank president has repeatedly said he is considering running for public office and joined the centrist PMDB party last September to keep that option open.

He must decide by April 2 whether to step down and run for office, but so far he has said nothing about his intentions, leaving financial markets to rely mostly on media reports and speculation.

According to some reports, the path for Meirelles to run for the governorship of Goias state has been opened as the PMDB’s favored candidate for the job, Iris Rezende, is dropping out of the race. A top PMDB official in the state denied Rezende was stepping aside.

But other reports say Meirelles is waiting for an invitation to run as a candidate for vice president in the ruling coalition. Still other reports say he is likely to stay on as central bank chief to the end of 2010 as President Luiz Inacio Lula da Silva has requested.

Meirelles, a former Wall Street banker who has headed the central bank since 2003, is widely credited with helping to stabilize Brazil’s economy with rigorous control of inflation. He helped steer Latin America’s largest economy through the financial crisis.

His departure could unnerve financial markets, raising fears that the bank will come under more political pressure to keep interest rates at historically low levels, although analysts expect an interim central bank chief would provide some continuity.

“Meirelles’ departure, if confirmed, could lead to a weakening of the central bank precisely at a moment when markets are anticipating that it will begin to raise interest rates,” Eurasia Group consultancy said in a report on Friday.

So far, the markets have taken the uncertainty in stride.

“I think when we get closer to his having to make a decision we will probably see a little more movement (in the markets),” said Marcio Nakane, economist at the Sao Paulo-based consultancy Tendencias.


Some believe that Meirelles’s election this month to the board of directors of the Bank for International Settlements (BIS) will reinforce his desire to keep his current job. If he steps down from the helm of Brazil’s monetary authority, he would lose his appointment to the BIS.

“The BIS question is something new,” said David Fleischer, professor of political science at the University of Brasilia. “That seems to be very important. It sort of increases the tendency that he will stay on until the end of the year.”

The Estado de Sao Paulo newspaper reported over the weekend that Meirelles would only leave the central bank in March if he was invited to become the running mate for chief of staff Dilma Rousseff, the likely presidential candidate of the ruling Workers’ Party.

That may be unlikely, given that Meirelles only recently joined the PMDB, which will choose the vice-presidential candidate.

“He is not what you would call a long-term member of the PMDB. He just came in through the window recently,” Fleischer said.

If Meirelles were to leave by April 2, a substitute would likely come from within the central bank, experts said.

Alexandre Tombini, deputy governor of the central bank, is often mentioned as the most likely replacement.

That would reassure some investors, most of whom are more concerned over who will be named as the new central bank head after the election. Meirelles could in theory stay on the job beyond 2010, but most expect him to seek a new challenge.

“The biggest problem is who will take his place. That is an issue that is widely discussed,” said a trader in Sao Paulo who asked not to be identified.

buy isoptin
buy viagra san francisco
Buy viagra cheaply
best place to buy generic viagra online
buy viagra online discount
viagra from canada
Buy viagra Mesa
buy real viagra online
Cheapest Viagra Online
Buy viagra usa
buy cheap viagra online
redtube viagra
buy viagra now
best place to buy viagra online reviews
buy discount viagra
canadian pharmacy generic viagra
viagra best buy
usa cialis
viagra best buy
buy sale viagra
cheapest viagra
buy viagra with discount