BRASILIA (Reuters) – Brazilian President Jair Bolsonaro signed into law on Wednesday legislation establishing the autonomy of the country’s central bank to ensure it is free from political obstruction.
The law does not change the way the bank sets interest rates but removes it from politics by setting four-year fixed terms for the regulator and its non-compliant directors. the presidential election circle further.
The bank’s president will no longer be part of the ministerial cabinet.
Bolsonaro praised the current head of the bank Roberto Campos.
“I did not sign this law only because I have confidence in your ability and integrity,” the president said.
The monetary authority already had de facto independence to implement policies necessary to achieve its inflation-targeted targets, but the bank’s president was technically a cabinet member who was announced by the president of Brazil.
The law maintains that the bank’s secondary objectives after fighting inflation include ensuring the stability of the financial system, fixing changes in a circle the economy, and encourage full employment.
Economists have said it will help promote economic sustainability, business confidence and attract investment.
Reporting by Anthony Boadle; Edited by Himani Sarkar