The degree of independence of the Brazilian Central Bank: repurchase agreements and central bank securities
This article discusses the institutional mechanisms which characterized the degree of the independence of the Brazilian Central Bank since its creation in 1964 until the implementation of the Real Plan in 1994. The relationship between the Brazilian Treasury and the Central Bank is analyzed from a historical point of view and two institutional aspects are particularly discussed: the usage of repurchase agreements and the issuance of Central Bank securities. It is shown that the Brazilian central bank effectively looses control over the money supply when the repurchase agreements are used, and that policy goals of the executive branch of the government are imposed on the Central Bank when the securities are issued, further reducing its autonomy.
: Central bank; independence; institutions; Brazil
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