Bank economist picked for Brazil central bank governor

RIO DE JANEIRO – The chief economist at the Itau Unibanco bank was named on Tuesday to head Brazil’s central bank amid the country’s worst economic crisis in decades. Israeli-born Ilan Goldfajn already worked at the central bank as director and held jobs at the International Monetary Fund and the World Bank.

Finance Minister Henrique Meirelles said Goldfajn will announce other members of his team as soon as the new governor is confirmed by the Senate. Until then Alexandre Tombini, who had served since 2011 under now-suspended President Dilma Rousseff, will stay on the job.

Tombini himself praised Goldfajn’s “skills and background.”

Meirelles became Brazil’s economy boss last week after interim President Michel Temer took office. In a press conference in Brasilia, the new finance minister said that the country will gradually win the trust of investors with its appointments and policies.

Brazil’s central bank expects the economy to dip 3 per cent this year alone.

Meirelles said that Brazil might have to introduce new taxes, contrary to the desire of most of the protesters, politicians and business leaders who backed the impeachment of Rousseff.

Although Temer’s fractious Brazilian Democratic Movement Party has been part of the government since 2005, Meirelles said he still needs a full assessment on the state of the economy to announce concrete measures to stimulate growth.

Meirelles brought a key opposition economist to make assessments on the state of the economy. Mansueto Almeida, a noted critic of government spending, worked with defeated presidential candidate Aecio Neves in his 2014 campaign.

The Sao Paulo stock exchange was falling 0.9 per cent early afternoon. Brokers said they approved the new economic team but said the announcement was no surprise.

Leandro Ruschel, a partner of Grupo L&S, said the stock market is now watching how Temer will govern in such an unstable political moment. On Monday, two unions rejected meeting the interim president and hinted there could be strikes against his administration.

“There is still the fact that President Rousseff has not been permanently removed,” Ruschel told Agencia Brasil. “The corruption probe at state-run oil giant Petrobras could also bring instability at any moment and involve key figures of Temer’s cabinet.”