Brazil’s Congress Seeks Power to Fire Central Bank Chiefs Amid Key Bank Sale Dispute

Brazil’s powerful Centrão bloc pushed on September 2 to fast-track a law letting Congress remove the Central Bank’s president and directors for “poor performance.”

The coalition—dominated by the Progressistas and União Brasil parties—filed an urgency request to amend the 2021 autonomy law, which now grants leaders fixed four-year, nonrenewable terms and limits dismissals to serious illness, crime or direct resignation.

Centrão leader Deputy Luizinho (RJ) said legislators can impeach the president, so they must also oversee central bankers. The petition, backed by six party leaders, would also require Senate approval for all future appointees.

This power play coincides with a heated dispute over the planned sale of Banco Master assets to state-owned BRB. Two Central Bank directors hold the deciding votes: one on licensing the deal, another on potential liquidation if liquidity worsens.

Each vote carries high personal stakes, fueling internal tensions dubbed “risco CPF.” Critics warn that politicizing the bank would erode its credibility, raise inflation expectations and drive up borrowing costs.

Brazil’s inflation remains above target, and its currency faces external pressures. Any hint of legislative meddling could unsettle markets and complicate price-stabilization efforts.

Supporters within Centrão argue that stronger oversight keeps powerful technocrats accountable. Their departure from President Lula’s coalition last week amplified their leverage over budget debates and pre-election maneuvering.

At stake is the balance between democratic control and institutional independence. Centred in Congress, the Centrão bloc now tests whether political influence will override expert-driven monetary policy or reinforce checks and balances in Brazil’s economic governance.

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