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Brazil: Chamber of Deputies Approves Autonomy of Brazilian Central Bank

(Mar. 2, 2021) On February 10, 2021, the Brazilian Chamber of Deputies approved Draft Law No. 19/2019, which grants autonomy to the Brazilian Central Bank (Banco Central do Brasil). The law defines the period for the mandates of the president and directors of the Central Bank, which must not coincide with that of the president of the republic. As the proposal originated in the Federal Senate, it will now be sent for presidential approval.

The law characterizes the Central Bank as an autarchy of a special nature with no ties, tutelage, or hierarchical subordination to any ministry, guaranteeing technical, operational, administrative and financial autonomy. According to the law, the bank’s main objective will continue to be ensuring price stability, but it must also ensure the stability and efficiency of the financial system, smooth out fluctuations in the level of economic activity, and promote full employment.

The law provides that the terms of office of the bank’s president and directors will be four years and that their terms will be staggered such that the president of the republic will appoint the majority of the board and the president of the bank only in the third year of a presidential term. Appointments of the bank president and directors of the bank will continue to depend on Senate confirmation.