Brazil Senate committee delays vote on central bank financial autonomy

Reuters

Brazil Senate committee delays vote on central bank financial autonomy

2024 7월 17, 오후 3:13 GMT

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>UPDATE 1-Brazil Senate committee delays vote on central bank financial autonomy</title></head><body>

Adds context in paragraph 3, details from government suggestions in paragraphs 4-6, comment from proposal sponsor in paragraph 7

BRASILIA, July 17 (Reuters) -Brazil's Senate Constitution and Justice Committee (CCJ) delayed on Wednesday a vote on a constitutional amendment proposal that would grant financial autonomy to the central bank, which was sponsored by conservative lawmakers but opposed by President Luiz Inacio Lula da Silva's government.

According to Senator Davi Alcolumbre, the committee's president, debate is expected to resume in August as per the request of the government's leader in the Upper House, Senator Jaques Wagner.

Congress granted the central bank operational autonomy in 2021, separating the governor's term from that of Brazil's president. Financial autonomy would give the bank more independence from the executive branch, as it would have full control of its budget for salaries and investments.

Earlier on Wednesday, the government sent suggestions for the text to the proposal's sponsor in the Senate, including that, under the new financial autonomy status, the central bank would fund the rural insurance program Proagro. Reuters reported the government's position on Tuesday.

The Treasury currently pays for the program.

In the document, seen by Reuters, the government does not classify the monetary authority as a public company as stipulated in the original proposal and clarifies that the central bank's expenditures would not affect the government's primary budget or its fiscal framework.

"The government's considerations are numerous, some are pertinent, others not so much. I can't take suggestions hours before the meeting and either accept or reject them," said the proposal's sponsor, Senator Plinio Valerio, adding he was willing to keep working toward an agreement.

The government argues that if the central bank becomes a public company, its annual results, which are currently covered by the Treasury as a financial expense when negative, would count towards primary flows, jeopardizing compliance with fiscal rules.

Reporting by Marcela Ayres; Editing by Rod Nickel

</body></html>