WRAPUP 5-Tombini tapped for Brazil c.bank, continuity seen

* Rousseff offers central bank post to Tombini – media

* Belchior picked to become planning minister in new gov’t

* Names floated at time of market unease over inflation
(Recasts, adds comments from source, legislator)

By Ana Nicolaci da Costa and Guillermo Parra-Bernal

BRASILIA/SAO PAULO, Nov 23 (BestGrowthStock) – Brazilian
President-elect Dilma Rousseff on Tuesday picked one of the
architects of the country’s inflation targeting regime to head
the central bank, a move likely to ease concerns about looser
monetary policy.

Rousseff offered the job to Alexandre Tombini, a veteran
central bank staffer who currently oversees financial system
regulation, according to several Brazilian media reports.
Tombini would replace his boss Henrique Meirelles, the longest
serving central bank president in Brazilian history.

The central bank declined to comment, but a source at the
bank said Meirelles approved of the choice. In recent days
Meirelles has sounded a lot like someone one on his way out,
saying that his tenure was only guaranteed until the end of
President Luiz Inacio Lula da Silva leaves office on Jan. 1.

Tombini’s appointment is likely to calm nerves in financial
markets, which have been on edge lately because of uncertainty
about Rousseff’s choices for her economic team.

Investors will look to Tombini to serve as a guarantor of
orthodox monetary policies at a time when concerns are mounting
about the pace of public spending under Finance Minister Guido
Mantega, who is set to remain in his post when Rousseff becomes
the first woman to lead Brazil.

“Tombini is a highly qualified economist with strong
technical qualifications and I am sure that his name will be
well received by the markets,” said Marcelo Carvalho, chief
Latin America economist for BNP Paribas in Sao Paulo.

“In my opinion, the central bank will continue to do what
it takes to keep inflation under control,” he added.

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Brazil’s key interest rate: http://r.reuters.com/bem26q

Key facts about Brazil’s economy: [ID:nN19135426]

Political risks in Brazil: [ID:nRISKBR]

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Rousseff is expected to meet with Meirelles later Tuesday
or Wednesday, after which she could formally announce her
economic team. A spokeswoman for Rousseff said an announcement
is likely by Thursday.

The president-elect also offered the Planning Ministry to
Miriam Belchior, who presently oversees the government’s
flagship infrastructure investment program, according to the
online edition of Folha de S.Paulo, which did not say how it
obtained the information.

Paulo Bernardo, the current planning minister, told Reuters
he was unaware of the nominations.

Tombini, 46, was part of a team of economists that devised
Brazil’s inflation targeting regime, which was adopted in 1999
and helped usher in the price stability and economic boom of
recent years.

His nomination comes as speculation swirls in markets that
the central bank might enjoy less autonomy to set monetary
policy under a Rousseff, who has argued that Brazil needs lower
interest rates to ensure sustained economic growth.

The Rousseff camp has repeatedly sought to play down those
concerns, insisting that the new government has no plans to
strong-arm the central bank.

“The government isn’t going to mix politics with the
central bank,” Candido Vaccarezza, a prominent legislator from
Rousseff’s Workers’ Party, told reporters in Brasilia.

“The central bank will have autonomy to fight inflation.”

RISING INFLATION

News of Tombini’s nomination broke on a day when
disappointing data on Brazil’s inflation rate and its current
account deficit fueled fears the central bank might need to
hike interest rates soon.

Consumer prices rose 5.47 percent in the 12 months through
mid-November, pushing inflation farther from the center of the
government’s year-end target of 4.5 percent, which has a
tolerance band of plus or minus 2 percentage points.
[ID:nN23291561]

Despite the short-term worries, few economists see Brazil
abandoning the policies — such as inflation targeting and a
floating exchange rate — that have helped turn Latin America’s
largest economy into an emerging market powerhouse.

Yields on interest rate futures contracts (0#DIJ:: ) rose
shortly after the inflation data was released but reversed
course throughout the day as investors bet that a Rousseff
government might try to force rates lower.

The yield on the contract due January 2012 (DIJF2: ), the
most highly traded of the session, sank 6 basis points to 11.78
percent on Tuesday. The yield on the contract maturing in Jan.
2013 (DIJF3: ), the second most-widely traded, dropped 5 basis
points to 12.27 percent.
(Additional reporting by Maria Carolina Marcello and Isabel
Versiani in Brasilia, Writing by Todd Benson; Editing by Andrew
Hay and Diane Craft)

WRAPUP 5-Tombini tapped for Brazil c.bank, continuity seen