Goldfajn’s vision: An interview with Brazil’s new central bank chief
Goldfajn, third from left, with the rest of Brazil's new cabinet under interim President Michel Temer. Credit: Agência Brasil Fotografias/Flickr

Goldfajn, third from left, with the rest of Brazil's new cabinet under interim President Michel Temer. Credit: Agência Brasil Fotografias/Flickr

19th May 2016

Ilan Goldfajn, the current chief economist at Itaú BBA, Brazil’s largest investment bank, will likely take office soon as President of the Brazilian central bank, pending approval by the Senate.
By Thierry Ogier
Shortly before he was picked for his new post by finance minister Henrique Meirelles, another central banker (2003-2010), the 50 year-old Haifa-born Goldfajn spoke to Latin Trade about the prospects for growth, falling interest rates and political consensus for reforms.
Before his return to the central bank, Goldfajn, a former economic policy director under Arminio Fraga’s governorship (2000-2003), sounded dovish.
Fiscal policy will be tight under Meirelles, but monetary policy may be looser than expected in other areas. Goldfajn predicts that the Selic interest rate (currently at 14.25 percent) may be cut in the second half of the year. “The central bank may not give any forward guidance before it cuts rates,” he said, and this may happen even though the Fed starts increasing its own rates in June. The magnitude of the rate cuts, he added, would depend on the impact on the exchange rate, which has been appreciating this year ahead of the suspension of president Dilma Rousseff and the appointment of a new government by Michel Temer. Some private-sector bank economists have been predicting bold rate cuts in the Selic rate. Marcelo Carvalho, from BNPParibas, has forecast a long easing cycle and a 525 basis point cut – towards a single-digit rate by the end of …

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