Brazil's central bank created a post on its board to improve transparency and communications two weeks after President Alexandre Tombini said it’s increasingly important for central banks to provide “forward guidance” to the market.
Tombini recommended that President Dilma Rousseff approve Luiz Edson Feltrim, currently executive-secretary, as the institution’s special affairs director, according to an e-mailed statement from the central bank yesterday. In a speech on May 10 in Rio de Janeiro, Tombini said transparency is key for the central bank given the “exceptionally complex moment for the global economy.”
“There is an ongoing trend in the world for more transparency at central banks,” Roberto Padovani, chief economist at Votorantim Ctvm Ltda, said in a phone interview yesterday. “Communication is becoming an important tool for monetary policy.”
It’s the first time Tombini has named a director since February 2011, when he appointed Altamir Lopes as director of administration and Sidnei Marques as director for liquidation and surveillance of farm credit operations.
Since the start of 2011, the central bank has surprised the market on three occasions by reducing the benchmark Selic rate more than expected.
The central bank’s new department will be responsible for “strengthening the relationship with citizens and social communication tools,” the central bank said on its website.
Policy makers led by bank President Alexandre Tombini voted Unanimously to lower the Selic rate by a half-point to 8.5 percent on May 30, as forecast by 61 of 70 analysts surveyed by Bloomberg. Policy makers, in a statement, said that inflation risks are “limited” and that “fragility” abroad is having a “disinflationary” impact in Latin America’s biggest economy.