Content area
Full text
The independence of the Banco Central do Brasil has long been a contentious issue. The bank's president and its directors are political appointees and conflicts between the bank and ruling politicians have led to periods of heavy staff turnover. However, recent developments in Brazil's National Congress may lead to some degree of independence for the central bank. The Congress is implementing a financial system reform that may allow for some changes in the bank's status. The reforms are expected to be completed, at the latest, in 1996.
Until then the authority for all monetary, credit and foreign exchange policies lies with the National Monetary Council, while the central bank carries the responsibility for executing these policies. The council is composed of the minister of finance, who serves as the council president, the minister of planning and budget and the president of the central bank. The bank is administered by a board of directors, who are appointed by the President on approval by the Senate. The directors do not serve a fixed-term period.
A...