Brazil's central bank will retain its status as a ministry in an upcoming cabinet reform by President Dilma Rousseff, two government sources told Reuters. Rousseff plans to reduce the number of ministries from 39 to 29 in the coming weeks as part of her efforts to cut public spending and overcome a severe political and economic crisis.
An early draft of the reform prepared by the Planning Ministry included the central bank among the government bodies that could be stripped of their ministerial status, but Rousseff will not accept that suggestion, said one of the sources, who asked not to be named because the plan is unfinished. Removing the central bank's ministerial status would probably put it under the authority of the Finance Ministry, which could raise suspicions about the independence of interest rate decisions.
It would also leave the bank more exposed to legal challenges; as a minister, central bank president Alexandre Tombini can only be tried by the Supreme Court. "Nothing will change about that. The central bank president will continue to be a minister," said one of the sources. Earlier this week, newspaper Folha de S.Paulo reported that Tombini threatened to quit if the central bank lost its ministerial status. The bank denied the report. The central bank was incorporated into the presidential cabinet in 2004.
Comments
Comments are closed.