BRASILIA, June 10 – A Brazilian Senate committee on Wednesday advanced a bill to grant the central bank financial autonomy, boosting its independence in a move opposed by President Luiz Inacio Lula da Silva’s administration.
The constitutional amendment expands the bank’s distance from the executive branch by giving it full control over its budget for salaries and investments, funded by income generated from its own financial assets.
The proposal now heads to a full Senate vote, where it must pass in two rounds before undergoing the same process in the lower house.
The vote marks a victory for central bank Governor Gabriel Galipolo after an intense lobbying effort for the 2023 bill, long championed by his predecessor Roberto Campos Neto, despite resistance from Lula’s administration, which opposed the measure until the final stages.
Lula’s leftist administration views the financial autonomy proposal as a further loss of influence over the central bank, which under the bill would no longer be part of the federal budget.
The bank had already gained operational autonomy in 2021, when a first constitutional amendment decoupled the governor’s mandate from the presidential term.
Backed by the central bank’s board, senior staff and part of its workforce, Galipolo argued the proposal was key to strengthening the institution’s finances amid emerging challenges.
That included staff losses, expanding supervisory responsibilities and the need for continued investment in technology to support operations and advance the Pix instant payment system, Brazil’s most widely used payment method.
The proposal enshrines Pix in the constitution as an exclusive central bank function for regulation and operation, effectively barring privatization.
The bank’s dual role in the system was recently criticized by the U.S. administration as one of the country’s unfair trade practices under a Section 301 probe, culminating in a proposal to impose new tariffs on Brazilian goods. REUTERS
