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Government studies easing rules for entrance of foreign financial institutions in Brazil

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The chairman of Brazil’s Central Bank of Brazil Ilan Goldfajn, told (no Friday, March 24) graduate students in an inaugural class at the Getulio Vargas Foundation in Rio that President Temer’s government is considering changing the authorization system for the entry of foreign financial institutions into Brazil. Mr. Goldfajn did not offer further details, but recalled that nowadays is in necessary a presidential decree  stating the national interest in each financial market operation by foreigners. Without these decrees no action is currently allowed by the Constitution.

Mr. Goldfajn said that economic policy is on the right track:”some say that real interest rates (inflation discounted) are very high, but these are people who are looking by the backmirror”, people that  are considering the inflation that has already occurred, rather than look ahead to the expectation for the next 12 months”.  hE said that  when considering inflation expectations and future interest rates, Brazilian real interest rates are at 5.5% Ante), against 8.7% of the calculation that looks at the accumulated inflation so far (ex-post interest). (Acess to Mr. Goldfajn presentation:

http://www.bcb.gov.br/pec/appron/apres/Apresentacao_Ilan_Goldfajn_Aula_Inaugural_FGV.pdf)