Brazil Central Bank head nominee vows to put up strong fight against inflation

Economist Ilan Goldfajn, appointed to take the helm of Brazil's Central Bank, vowed to put up a strong fight against inflation and to lead the financial institution with diligence towards meeting the target set by the National Monetary Council (CMN). The actions are required to recover the country's growth and confidence, he said. “[My goal] is to fully meet the center of the target,” he declared.

Goldfajn spoke today (Jun. 7) to the Senate's Commission for Economic Affairs (CAE) as part of his confirmation hearing. Should his name be approved, the commission is expected to send a message to the full Senate, which should deliberate on his nomination as president of the Central Bank (BC).

A survey released by the BC Monday (6) shows that the inflation predicted by financial institutions this year, as measured by the National Broad Consumer Price Index (IPCA), was revised from 7.06% to 7.12%. The estimate stands above the center of the target, 4.5%.

“At the helm of the Central Bank, I will respond to the confidence placed in me by reaching the inflation target, thus contributing to the recovery of the country's sustainable economic growth as well as its social progress, with benefits for every social layer, especially those most underprivileged, those who most suffer from the loss in purchasing power facing the currency,” he said.

He argued that it is the BC's well known and defined mission to ensure the stability of the currency's purchasing power and a solid and efficient financial system. “In this connection, the Central Bank's first contribution to the Brazilian society will be to hold inflation down and hold it steady,” he noted.

Fiscal policy

Goldfajn went on to say that the growth recovery can be achieved by the end of this year or in 2017, if confidence returns and the fiscal control actions to be submitted to Congress are approved.

Ilan Goldfjan further argued that Brazil's savings rate is low and called for tools to improve this scenario and address uncertainties with a view to drawing investment to the country.

The economist also described as “crucial” maintaining and enhancing the Central Bank's autonomy. “It's not about ambition or personal desire, but a measure that benefits society through the reduction of the expected levels of inflation, the fall in the country's risk, and the improve in confidence,” he explained.

Translated by Fabrício Ferreira