Brazil's central bank governor, Henrique Meirelles, will step down from his position, according to a report in the Folha de Sao Paulo newspaper.
He will apparently be succeeded by the central bank's financial regulation head, Alexandre Tombini.
The measure was widely expected in connection with the emergence of newly elected President Dilma Rousseff, who assumes office in January.
Meirelles was regarded as an “inflation hawk” and was the longest-serving central bank chief in the nation’s history.
The Brazilian central bank commenced tightening monetary policy in April of this year, to cool down what was perceived to be an overheating economy – the Selic rate is now at 10.75 percent following three straight rate hikes.
However, data released yesterday revealed that Brazilian inflation reached 5.47 percent in November, well above the central bank’s year-end target of 4.50 percent.
Yesterday, Neil Shearing, senior emerging markets economist at Capital Economics, commented that even with a new central bank chief “there is little to suggest that the new administration is about to undertake a much-needed rebalancing of the policy mix in favor of tighter fiscal policy and looser monetary policy, which will be essential to shifting Brazil to a higher growth path.”
Shearing praised the outgoing central bank chief.
“Meirelles will be a tough act to follow,” he wrote.
“Since he took office in January 2003, the [central bank] has met its inflation target in all but his first year. This was achieved by tempering [Finance Minister Guido] Mantega’s relatively loose fiscal stance with correspondingly tight monetary policy.”
Shearing added he continues to expect gradual interest rate hikes to take the Selic to just 11.25 percent by end-2011, from 10.75 percent currently.