Brazil names new central bank head, eyes reforms

Brazil's interim government today named economist Ilan Goldfajn as the new head of the central bank, a key post in the fight to coax the giant economy out of recession.
Israeli-born Goldfajn, 50, will be a lynchpin in efforts to revitalize the country after Michel Temer assumed the presidency in place of Dilma Rousseff, suspended last week to face an impeachment trial that she says amounts to a coup.
The Senate must confirm the banker's nomination.
Temer's finance minister Henrique Meirelles announced the nomination, along with the rest of his economic team, which is looking at potentially painful ways to balance the country's battered finances -- a process that Meirelles said would begin with careful scrutiny of the true state of macroeconomic ills.

Brazil is enduring its worst recession in decades. The economy shrank 3.5 per cent last year, and the IMF has forecast similar negative growth for 2016.
Inflation is at around 10 percent and the central bank has maintained its interest rate at 14.25 percent for six consecutive months, stuck between fear of stoking price rises and desire to stimulate the economy.

And Brazil's inability to bridge a widening fiscal gap led to major credit rating agencies stripping Latin America's biggest economy of its investment grade rating last year.
Temer says he is planning to start addressing that imbalance through pension system reforms and cuts to the country's bloated government, although he has sought to calm fears of steep reductions to the Rousseff government's generous social programs.

Indicating the sensitivity of potential cuts, newly appointed Health Minister Ricardo Barros issued a statement denying that he had suggested tinkering with the constitutional right to universal health care.
Despite saying in an earlier interview with Folha de Sao Paulo newspaper that the government would have to "renegotiate," as in debt-stricken Greece, he said Tuesday that health care for everyone "is a guaranteed right."
But Meirelles struck a cautious note Tuesday, saying no measures would be taken before a forensic examination of the situation inherited from Rousseff's government.
"To establish a (fiscal) target it's necessary to know what the deficit is this year, what receipts will be, and whether any taxes are necessary. All this will be under analysis this week," he said.

The finance minister has urged for the new government "to start telling the truth" about the state of accounts.