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Thursday, 12 December, 2002, 22:48 GMT
Brazil names new central bank governor
Brazilian President-elect Luiz Inacio Lula da Silva, finance minister elect Antonio Palocci, and Henrique de Campos Meirelles,
MR de Campos Meirelles receives a warm welcome
Brazil's President-elect Luiz Inacio Lula da Silva - also known as Lula - has appointed a former investment banker as the new head of the country's central bank.

Henrique de Campos Meirelles, who resigned from FleetBoston Financial in August to enter Brazilian politics, will replace central bank President Arminio Fraga.

Incoming finance minister Antonio Palocci described Mr de Campos Meirelles as "one of the most respected people in the national and international financial systems".

"Brazil's economic situation is fully viable," Mr Meirelles said.

"The fundamentals of Brazil's economy are sound."

Mixed reaction

But he did not give the markets a lead about what he would do to sort out the country's inflation crisis.

What the market wants is a clone of Arminio Fraga, which we don't have," said Alcides Amaral, former president of Citibank in Brazil.

The Brazilian currency fell 0.4% making $1 worth 3.784 real while the Sao Paulo Stock Exchange's benchmark Bovespa index closed down 0.25% at 10,586.9.

"The market didn't dislike the name, but it didn't like it that much either," said Alexandre Vasarhelyi, head of foreign exchange at ING Bank.

Negotiations

Mr de Campos Meirelles is widely seen as a very successful banker with a great understanding of global economics and with close ties with the world of international finance.

Such skills and connections could well be useful when Brazil again enters aid negotiations with the International Monetary Fund (IMF).

In August, the IMF agreed to inject up to $30bn in fresh aid.

"If he has a good team in place he can do the day-to-day," said Mr Fraga.

"He's an executive, he knows how to manage teams properly."

FleetBoston's Latin American franchise is known as BankBoston

Lula will take office on 1 January.

See also:

10 Dec 02 | Business
11 Nov 02 | Business
05 Nov 02 | Business
01 Nov 02 | Business
29 Oct 02 | Americas
28 Oct 02 | Business
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