By Marcela Ayres
BRASILIA, Dec 5 (Reuters) – Brazilian President Luiz Inacio Lula da Silva is not expected to submit his next two nominees for the central bank’s rate-setting board until next year, three sources familiar with the matter told Reuters, leaving only seven of the nine seats on the committee filled for the January interest rate decision.
The last two central bank directors appointed by Lula’s predecessor reach the end of their terms this month, and the leftist Brazilian leader has been slow to name their replacements. His government’s relations with the Senate, which must confirm the nominations, also are strained by a standoff over Lula’s latest Supreme Court nominee.
Although Diogo Guillen and Renato Gomes could legally stay on the bank’s rate-setting committee, known as Copom, until their successors take office, they are expected to step down, two of the sources said on condition of anonymity. Their responsibilities would then be temporarily taken up by other members of the rate-setting board – all named by Lula.
Copom has never made a policy decision with two empty seats, according to public records of meeting minutes since 1998.
The central bank, Finance Ministry and presidential palace did not immediately comment on the matter.
Markets are watching closely to see if the central bank will start a much-anticipated cycle of interest rate cuts at its January 27-28 meeting or delay the easing until March.
Latin America’s largest economy has shown signs of cooling off, with GDP growing only 0.1% in the third quarter from the previous three-month period. The central bank has held its key policy rate at 15% since July, the highest level in nearly two decades, and is expected to maintain that stance at its policy meeting next week, according to a Reuters poll of economists.
Central bank chief Gabriel Galipolo has cited inflation expectations that remain above the 3% target to justify the current monetary policy position.
Once nominated by the president, central bank board candidates must undergo a confirmation hearing in the Senate’s economic affairs committee, followed by a full floor vote.
“I haven’t been approached about central bank nominations,” Senator Renan Calheiros, a government ally who chairs that committee, told Reuters.
Senator Jaques Wagner, the government’s leader in the upper house, said the administration “must be working on the issue, but nothing has reached me.”
This year’s crowded legislative calendar ends on December 22.
Lula’s agenda is facing headwinds in the Senate after tapping – but not yet formalizing – his Solicitor General Jorge Messias for a Supreme Court seat, angering Senate President Davi Alcolumbre, who had pushed for another selection.
Brazil’s Congress will resume its schedule on February 2.
Without Senate approval this year, new directors could only join Copom in time for its March 17-18 meeting, the second one of 2026.
HANDFUL OF POTENTIAL CANDIDATES
Two of the sources said the government itself has not settled on its central bank nominees.
One option would be for the central bank’s international affairs director, Paulo Picchetti, to shift into Guillen’s economic policy role, one source said. That job is one of the bank’s most strategic positions, responsible for the technical assessment of economic conditions that underpin rate decisions.
Picchetti is close to Finance Minister Fernando Haddad and has a strong background in measuring inflation.
The same source said the government may tap a career central bank staffer to fill the role vacated by Gomes, who is in charge of the organization of the financial system.
Potential candidates for that job include Gomes’ chief of staff, Angelo Duarte; Carolina Bohrer, the department head at the central bank; and Rogerio Lucca, the central bank’s executive secretary who some see as close to Galipolo.
The central bank and government declined to comment on potential nominees.
(Reporting by Marcela AyresEditing by Brad Haynes and Paul Simao)
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