Meirelles, Brazil finance minister to calm markets

[BRASÍLIA] With a record for calming market turbulence, the man tapped to be Brazil's new finance minister, Henrique Meirelles, now has the mission of rescuing Latin America's biggest economy from its worst crisis in decades.

The 70-year-old conservative headed the Brazilian central bank from 2003 to 2011 under former leftist president Luiz Inacio Lula da Silva.

Now the former private banking executive has been named minister by center-right leader Michel Temer, who took over as interim president Thursday from Dilma Rousseff while she faces an impeachment trial.

Aside from overcoming the political crisis that culminated in Ms Rousseff's suspension, their priority is to tackle Brazil's worst recession in decades.

The country is in the middle of its second year of recession and is not forecast to return to growth until 2018.

The economy contracted 3.8 per cent last year, its worst performance in 25 years.

Economists forecast that collapse will continue this year, which would make it the first double-year recession since the Great Depression in the 1930s.

Analysts say Mr Meirelles will have to help Mr Temer succeed where Ms Rousseff failed in bolstering the public finances through unpopular spending cuts and reforms of pensions and taxation.

Mr Meirelles was called upon once before to come the country's aid in economic troubles.

Financial markets and foreign investors did not trust Mr Lula and his leftist social welfare policies when he took office in 2003.

That fueled financial chaos that brought Brazil close to defaulting as neighboring Argentina had done two years earlier.

Mr Meirelles took over the central bank, where he tamed inflation with orthodox monetary policies.

Brazil went through one of its biggest booms ever during his time in the post.

Mr Meirelles gave up a recently won seat in Congress to take up the central bank job.

"I am coming back to my natural habitat, which is the financial markets," he said at the time.

"I am giving up my little political career."

He has a reputation as a workaholic who sleeps five hours a night. Little is known of his hobbies.

He has won various awards in his financial career.

An engineer by training, he studied at Harvard Business School and went on to serve as a top executive at the Bank of Boston. He now leaves a position in Brazil's Banco Original to take up the ministerial post.

He had close ties to Mr Lula but did not get on with Ms Rousseff and left the central bank when she took office.

She resisted Mr Lula's suggestion that she make Mr Meirelles her vice president, choosing Mr Temer instead.

Analyst Neil Shearing at research group Capital Economics called Mr Meirelles "an impressive appointment."

"During his time as the head of the central bank, Mr Meirelles forged a reputation as being tough on inflation and has recently made a string of interventions calling for curbs to government spending," he wrote.

He warned however: "Asset prices have rallied in anticipation of Ms Rousseff's departure, to the extent that most of the good news from a shift in policy has now been priced in."

AFP