BRASIL: Central Bank Raises Reserve Requirements To Slow Inflation.

BLOOMBERG/ Andre Soliani and Iuri Dantas / 

     Following recent moves by China, Brasil's central bank raised reserve and capital requirements to slow consumer lending that’s growing 20 percent annually and to prevent a credit bubble.
      The bank's outgoing chief Henrique Meirelles( pictured) estimates that $36 billion usd will be removed from circulation as time deposits rise to 20 percent from 15 percent and an additional requirement for non- interest bearing accounts will climb to 12 percent from 8 percent.
    For foreign bond investors, the move is a "burburinho," a big deal, as rates plummeted.
     Consumer prices grew by 5.47 percent through mid-November, the highest since March 2009. The bank's inflation target is 4.5 percent, plus or minus two percentage points.

BRASIL: Rousseff Says Bye, Bye Meirelles, Oi Tombini.

BLOOMBERG/ Andre Soliani and Iuri Dantas/
    President-elect Dilma Rousseff has nominated Alexandre Tombini (pictured), 46, as new central bank head replacing long-serving 65-year-old Henrique Meirelles. Rousseff also nominated Guido Mantegna to remain as Finance Minister.
     Tombini has been a central bank board member since 2005.
     “The fact that it is him instead of someone else ensures the central bank won’t be taken by a new heterodox philosophy -- that there will be continuity,” said strategist Tony Volpon.
“Tombini has a good education, he’s a professional,” said economist Pedro Tuesta. "The problem is that this gives the impression that Dilma wants to have greater control of the central bank. I’m not saying that’s the way it is. She gives us that impression, and the impression has a certain base.”

BRASIL: 1ST UPDATE: Central Banker Meirelles Refuses To Stay Unless Autonomy And Permanence Promised.

BBC/LONG PROFILE With Graphs / 
Robert Plummer /
    Longtime Central Bank chief Henrique Meirelles  says he will quit UNLESS President-elect Dilma Rousseff promises him guarantees of “absolute autonomy” and allows him to stay on the job well past the first quarter of 2011. He will meet with Rousseff  next week.
    Meirelles has been monitoring Brasil's inflation rate for nearly eight years.
    The media report that Rousseff wants to lower the high interest rates that Meirelles believes kept Brasil's infamous inflation finally in-check.
    The rumor is that Finance Minister Guido Mantega is safe and has accepted Rousseff’s invitation to remain in his position.

UPDATE, 19 NOV: FOR  MANTEGNA DETAILS , SEE:
http://en.mercopress.com/2010/11/19/brazilian-central-bank-chief-steps-down-from-president-elect-rousseff-s-team

BRASIL: Central Banker Meirelles Blames US Stimulus For Currency Wars.

BLOOMBERG/ Andrew J. Barden and Iuri Dantas/
    Central Bank President Henrique Meirelles (Pictured) believes that U.S. monetary stimulus and NOT the accumulation of reserves by emerging nations is creating the biggest imbalance in world economies.
  “The most important imbalance today is the American monetary expansion, which is being used to fight lower growth and unemployment still high in the U.S. -- this is the biggest injection of liquidity in the international economy," he said.

BRASIL: Mantega's "Currency War" Backfires As REAL Grows Stronger; Meirelles Hints Of New Measures.

BLOOMBERG/ Ye Xie :
  In late September, Finance Minister Guido Mantega (Pictured) said that he would take measures to curb the REAL’s volatility and limit gains in a global “currency war.” So far he’s failed.
 Instead, the REAL is heading toward its eighth straight weekly advance, the longest streak since 2004, and has surged 38 percent since the beginning of 2009. It has gained 111 percent since President Lula da Silva took office in 2003, the most in the world.
  Meanwhile central bank president Henrique Meirelles stated that: “Brasil cannot pay an excessive price for the fact it’s doing well while others are doing badly. Many countries started to take measures in this regard and, evidently, Brasil needs to take its measures to protect itself from these imbalances.”

BRASIL: Central Bank Raises Selic Rate; Real Surges.

BLOOMBERG/   The Real strengthened 0.7% after the central bank lifted the benchmark lending rate to 9.5 % from a record-low 8.75% to rein in inflation. Interest-rate futures are betting that Brasil will raise borrowing costs to 12.75% by year-end. “Interest rates are low in the most important economies and we don’t have many alternatives in the world right now,” said Solange Srour Mellon Bank economist which manages about 11.4 billion reais. “The trend for the real is to appreciate.”

BRASIL: Risks Of Economic Overheating As Central Bank Meets.

REUTERS/    With growth forecasts as high as 7%, economists worry that Brasil's surging economy could overheat. It's central bank meets tomorrow and is expected to raise rates for the first time in two years but some economists think the bank will not raise rates enough --because its an election year. Central Bank President Henrique Meirelles said that Brazil was not behind the curve on interest rates and he would act forcefully to cap inflation. "A 75-point hike has become a minimum for the central bank to reassert its credibility and to extinguish the political doubts that Meirelles created in recent months," claims economist Sergio Vale.