Meirelles unlikely to stay head of Brazil central bank-report

* Meirelles likely to be replaced as BCB head, Estado says

* President-elect Rousseff wants fast reduction in rates

* Meirelles could be appointed ambassador to the U.S.

SAO PAULO, Brazil, Nov 7 (BestGrowthStock) – Brazil’s
President-elect Dilma Rousseff is unlikely to ratify central
bank President Henrique Meirelles in his post, mainly because
of Meirelles’ aversion to cut interest rates rapidly, O Estado
de S. Paulo newspaper reported on Sunday, citing a person with
direct knowledge of Rousseff’s plans.

Rousseff, who won a runoff vote last Sunday with about 56
percent of valid votes, wants the central bank to signal that
borrowing costs will decline during her first year of
government without risking Brazil’s economic stability, the
newspaper reported, citing the source.

According to O Globo newspaper, which cited people with
direct knowledge of her plans, Rousseff will likely resist
pressure from allies to name an austere policymaker with strong
inflation-fighting credentials. Rousseff wants someone more in
line with her pro-growth policy stance at the helm of the bank,
Globo added.

A central bank spokesman in Brasilia declined to comment on
both reports. Rousseff’s campaign advisors sought by Reuters
for comment could not be immediately reached.

Incumbent President Luiz Inacio Lula da Silva appointed
Meirelles early in 2003 to help reassure investors that his
government would not allow inflation to gather momentum.
Meirelles lifted the so-called Selic rate (BRCBMP=ECI: ) shortly
after his appointment and quickly won the trust of markets.

The role of the central bank president has been a frequent
center of controversy during Lula’s almost eight years in
power. Lula allies, while praising Meirelles’ efforts to keep
consumer prices in check, have claimed that higher interest
rates put the brakes on economic growth.

Brazil has the highest borrowing costs in the world among
the world’s 20 biggest economies, a fact that makes it
expensive for consumers and businesses to take on new credit to

Critics also say that those high rates are attracting
speculative capital from overseas, boosting the value of the
country’s currency, the real (BRBY: ), and hurting Brazilian
exports overseas.

Neither newspaper mentioned any possible candidates for the
central bank job.

Meirelles could be offered the post of Brazil’s ambassador
to the United States, the newspaper reported. Meirelles, a
former global president of Fleet Boston Corp., seems to like
the idea, Estado said.

(Reporting by Guillermo Parra-Bernal)

Meirelles unlikely to stay head of Brazil central bank-report