Sources: Brazil’s Bolsonaro vexed by central bank autonomy

Aug 20, 2021, 12:13 PM | Updated: Aug 21, 2021, 6:19 am

BRASILIA, Brazil (AP) — Brazilian President Jair Bolsonaro has begun expressing irritation at the central bank’s newfound autonomy as surging inflation presents a threat to his 2022 reelection prospects, government officials told The Associated Press.

On Thursday, during a flight home from Mato Grosso state, Bolsonaro said he regretted signing the bill into law earlier this year that granted the bank autonomy, a high-level official aboard told AP. Separately, Bolsonaro on several recent occasions has expressed discomfort with the autonomy and said he would like to interfere in monetary policy, a minister who has heard such complaints himself told AP. Both spoke on condition of anonymity because they weren’t authorized to speak publicly.

The law passed in February sought to protect the bank from political meddling and burnish Brazil’s economic credibility among investors. Under the law’s terms, the president still nominates the central bank chief, but cannot fire him for disagreements about monetary policy.

Bolsonaro in 2018 provided assurances that he would remain hands-off economic policymaking, and the market celebrated his pick to lead the central bank: economist and former trader Roberto Campos Neto, who began a fixed four-year term in April.

Neither the office of the presidency nor the central bank responded to requests for comment about Bolsonaro’s statements. Following the story’s publication, Bolsonaro’s chief of staff, Ciro Nogueira, wrote on Twitter that there is no crisis between Bolsonaro and Campos Neto.

“I give my testimony that the relationship of the government with the central bank is excellent, that autonomy of the monetary authority is an historic and irreversible advance,” Nogueira wrote.

Bank autonomy is among few significant economic reforms that Bolsonaro’s administration has managed to secure. Others have faced headwinds, including lately a tax reform proposal, at the same time as the government signals it may boost spending next year despite limited fiscal space.

That has prompted a sell-off due to concerns about Brazil’s fiscal policy outlook, as well as speculation the market could give up hope on the Bolsonaro administration’s will or ability to deliver further reforms — particularly as the president keeps focusing energy on his simmering feud with the Supreme Court.

Twelve-month inflation is tracking at almost 9%, its fastest pace in over five years. After the government drew down pandemic welfare disbursements, the poor have been especially hard hit by double-digit increases in the prices of foodstuffs, cooking gas and electricity.

Economists surveyed by the central bank have raised their 2021 inflation forecast for 19 straight weeks, and the cost-of-living increase is expected to exceed the bank’s target for the first time in six years.

Economists expect 3.9% inflation in 2022, nearly the midpoint of the bank’s target range after creeping upward in recent weeks. Still, the minister who spoke on condition of anonymity told the AP that Bolsonaro has spoken of his concern about out-of-control inflation during the election year.

The Supreme Court is scheduled to begin analysis of the law’s constitutionality on Aug. 25. Bolsonaro voiced support for the court to uphold bank autonomy at a June 22 ceremony, during which he said everyone trusts in Campos Neto.

His statement about regretting autonomy came in response to comments hours earlier from Campos Neto, who the president said he wished he could replace with the stroke of a pen, according to the official present. Campos Neto said in an online event hosted by the Council of the Americas that “local noise” has had an impact on 2022 inflation expectations.

“There is uncertainty, or at least a higher level of noise, in the institutional part of how Brazil works and the fight between powers,” Campos Neto said, adding that the market has also understood the government is seeking to increase spending of its conditional-cash transfer program for the poor.

“In other words, the market is associating some of the actions the government is taking to a will to have a more robust program, and they’re linking some of the things the government is doing with the election, and I think that creates additional noise,” he said. ___ Biller reported from Rio de Janeiro.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


FILE - The seal of the Board of Governors of the United States Federal Reserve System is displayed ...
Associated Press

Wyoming crypto bank’s Federal Reserve application denied

CHEYENNE, Wyo. (AP) — The Federal Reserve Board has denied a Wyoming cryptocurrency bank’s application for Federal Reserve System membership, officials announced Friday, dealing a setback to the crypto industry’s attempts to build acceptance in mainstream U.S. banking. Many in crypto have been looking to Cheyenne-based Custodia Bank’s more than 2-year-old application as a bellwether […]
17 hours ago
In this image provided by the U.S. Air Force, Senior Airmen Andrew Whitener and Tyler Glodgett 341s...
Associated Press

Nuclear strike chief seeks cancer review of launch officers

WASHINGTON (AP) — The top Air Force general in charge of the nation’s air- and ground-launched nuclear missiles has requested an official investigation into the number of officers who are reporting blood cancer diagnoses after serving at Malmstrom Air Force Base in Montana. The illnesses became publicly known this week after The Associated Press obtained […]
17 hours ago
FILE - An Amazon Fresh grocery store stands in Warrington, Pa., on Feb. 4, 2022. In an email to Pri...
Associated Press

Amazon axes free grocery delivery on Prime orders under $150

NEW YORK (AP) — Amazon is axing free grocery delivery for Prime members on orders less than $150. Customers who get their groceries delivered from Amazon Fresh — and pay less than $150 — will be charged between $3.95 and $9.95, depending on the order size, the company said in an email to Prime members […]
17 hours ago
FILE - Fireworks explode over the ancient Parthenon temple at the Acropolis hill during New Year ce...
Associated Press

Fitch ups Greece’s rating to a notch below investment grade

NEW YORK (AP) — Credit ratings company Fitch has raised Greece’s credit rating to one notch below investment grade. In a report issued Friday, Fitch estimates that Greece’s deficit will shrink to 1.8% of its gross domestic product in 2024 from an estimated 3.8% last year. “There is some uncertainty around fiscal policies after the […]
17 hours ago
FILE - Retired Jamaican sprinter Usain Bolt speaks during an interview in Tokyo, Thursday, Dec. 1, ...
Associated Press

Usain Bolt fires business manager over Jamaica fraud case

SAN JUAN, Puerto Rico (AP) — Jamaican sprinter Usain Bolt told reporters Friday that he is baffled over how $12.7 million of his money has gone missing from a local private investment firm that authorities are investigating as part of a massive fraud that began more than a decade ago. Bolt also said he has […]
17 hours ago
This image taken from video provided by the NAOJ & Asahi Shimbun, shows spiral swirling through the...
Associated Press

Camera captures night sky spiral after SpaceX rocket launch

HONOLULU (AP) — A camera atop Hawaii’s tallest mountain has captured what looks like a spiral swirling through the night sky. Researchers believe it was from the launch of a military GPS satellite that lifted off earlier on a SpaceX rocket in Florida. The images were captured on Jan. 18 by a camera at the […]
17 hours ago

Sponsored Articles

Fiesta Bowl Foundation

Celebrate 50 years of Vrbo Fiesta Bowl Parade magic!

Since its first production in the early 1970s, the Vrbo Fiesta Bowl Parade presented by Lerner & Rowe has been a staple of Valley traditions, bringing family fun and excitement to downtown Phoenix.
Day & Night Air Conditioning, Heating and Plumbing

Prep the plumbing in your home just in time for the holidays

With the holidays approaching, it's important to know when your home is in need of heating and plumbing updates before more guests start to come around.
(Photo via MLB's Arizona Fall League / Twitter)...
Arizona Fall League

Top prospects to watch at this year’s Arizona Fall League

One of the most exciting elements of the MLB offseason is the Arizona Fall League, which began its 30th season Monday.
Sources: Brazil’s Bolsonaro vexed by central bank autonomy