Brazil Senate Moves to Vote on PEC 65 That Would Give Central Bank Budgetary Autonomy

Overview

• The PEC 65/2023 cleared the Senate Constitution and Justice Commission and is formally ready for plenary consideration, with Senate President Davi Alcolumbre saying on Wednesday he intends to bring the text to a vote soon.
• If approved the amendment would convert the Central Bank into a special public entity with its own administrative, accounting, budgetary and financial powers and the constitutional ability to retain seigniorage revenue instead of transferring it to the Treasury.
• Finance Minister Dario Durigan has publicly warned the measure could create “a new Power,” exclude audits by the Comptroller-General and introduce distortions in public accounting, and a group of economists published a manifesto arguing the text would weaken democratic oversight.
• The Central Bank board, led by Gabriel Galípolo, and banking groups such as ABBC and Febraban defend the change as needed to fund supervision and regulation; government negotiators are pressing for safeguards on audits, public accounting and parliamentary review of the BC budget.
• As a constitutional amendment the PEC must pass two Senate rounds with a three-fifths majority before moving to the Chamber of Deputies, so final approval will depend on negotiations over oversight, budget mechanics, the BC’s new 'police' powers and a clause protecting Pix.