## Brazil’s Ilan Goldfajn on Central Bank Communications – IMF F&D | DECEMBER 2019 ## Source details **Canonical URL:** [Brazil’s Ilan Goldfajn on Central Bank Communications – IMF F&D | DECEMBER 2019](https://www.imf.org/en/publications/fandd/issues/2019/12/brazils-ilan-goldfajn-on-central-bank-communications-trenches) ## Other formats - [Markdown version](/en/publications/fandd/issues/2019/12/brazils-ilan-goldfajn-on-central-bank-communications-trenches/index.md) - [Structured JSON version](/en/publications/fandd/issues/2019/12/brazils-ilan-goldfajn-on-central-bank-communications-trenches/index.json) - [Bundle manifest](/en/publications/fandd/issues/2019/12/brazils-ilan-goldfajn-on-central-bank-communications-trenches/bundle-manifest.json) ## Bibliographic details - Published: December 1, 2019 --- ### Central message: conviction, regime adherence, and selective deviation from consensus - Central bankers should follow their convictions and the guidance of their policy regime, even when this means going against markets, press, and analysts. - Examples: - In mid-2016, during his first two weeks as governor, Goldfajn disagreed with widespread calls to adjust Brazil’s inflation-targeting regime despite high inflation perceptions; inflation in 2017 was 2.95 percent, below target. - By 2018, despite rising U.S. interest rates and expectations that Brazil should raise rates, Brazil kept rates unchanged because the economy was recovering slowly and inflation remained low—another instance of resisting consensus. - Rationale: sticking to the framework and coordinated expectations can make challenging inflation targets achievable. ### Transparency and communication practices - Major changes implemented to increase transparency: - Changed the monetary policy decision announcement and the minutes. - Communicated in simpler, more concise, and straightforward language to clarify actions and conditionality. - Operational detail preserved: - Monetary policy decision comes out on a Wednesday and the minutes on the following Tuesday morning. - Communication objectives: - Influence and anchor inflation expectations by signaling what the central bank intends to do “depending on what would happen next.” - Provide rationale so stakeholders understand decisions, not only the decisions themselves. ### Institutional constraints, public scrutiny, and conduct - Governance and personal conduct: - Governors are under 24-hour scrutiny; public officials must be careful about public statements and use of public resources (examples: driver, plane). - Public perception during crises extends to personal demeanor and behavior. - Implication: heightened transparency demands greater discipline in both public communication and private conduct. ### Views on central-bank roles and mandates - Crisis expectations and independence: - Perception of central banks as powerful crisis-fighting tools increases political pressure to do more. - Unconventional policies after the global financial crisis prompted political questioning in some advanced economies. - Dual mandate considerations: - Central banks already consider inflation and growth trade-offs in the short term (stimulate in recessions, weigh trajectory toward target). - Long-term growth determinants—productivity, education, investment—are largely outside central-bank mandate; central banks contribute through stability but cannot by themselves generate productivity growth. ### Exchange rate policy stance - Approach to exchange-rate pressures: - There is a role for the central bank in dealing with disorderly market conditions and helping markets function better. - Otherwise, allow the exchange rate to fluctuate in a way that reflects fundamentals and shocks. - Policymakers must develop a framework to determine when to intervene and when to let the exchange rate reflect current economic reality. ### Background and career highlights (contextual) - Personal and professional context: - Born in Israel; grew up in Rio de Janeiro during severe economic instability (four currency changes in seven years; inflation upward of 80 percent a month). - Earned a PhD from the Massachusetts Institute of Technology. - Worked with Asian countries at the IMF during the late 1990s. - Deputy governor for economic policy at Brazil’s central bank in the early 2000s. - Chief economist of Itaú Unibanco from 2009 to 2016. - President of Brazil’s central bank from June 2016 to February 2019. - Recently named Credit Suisse’s new chairman in Brazil. *Interview with F&D’s Andreas Adriano, F&D Magazine, December 2019. Opinions expressed are those of the author and do not necessarily reflect IMF policy.* --- ## Content in this bundle - **في خندق العمل** - [في خندق العمل (Markdown version)](/-/media/files/publications/fandd/article/2019/december/ar/trenches.pdf.md){rel="alternate" type="text/markdown"} - [في خندق العمل (PDF)](/-/media/files/publications/fandd/article/2019/december/ar/trenches.pdf){rel="external" type="application/pdf"} - **Brazil’s Ilan Goldfajn on Central Bank Communications – IMF F&D | DECEMBER 2019** - [Brazil’s Ilan Goldfajn on Central Bank Communications – IMF F&D | DECEMBER 2019 (Markdown version)](/-/media/files/publications/fandd/article/2019/december/brazils-ilan-goldfajn-on-central-bank-communications-trenches.pdf.md){rel="alternate" type="text/markdown"} - [Brazil’s Ilan Goldfajn on Central Bank Communications – IMF F&D | DECEMBER 2019 (PDF)](/-/media/files/publications/fandd/article/2019/december/brazils-ilan-goldfajn-on-central-bank-communications-trenches.pdf){rel="external" type="application/pdf"} - **En las trincheras: Ir contracorriente ● Finanzas y Desarrollo ● Diciembre de 2019** - [En las trincheras: Ir contracorriente ● Finanzas y Desarrollo ● Diciembre de 2019 (Markdown version)](/-/media/files/publications/fandd/article/2019/december/es/brazils-ilan-goldfajn-on-central-bank-communications-trenches.pdf.md){rel="alternate" type="text/markdown"} - [En las trincheras: Ir contracorriente ● Finanzas y Desarrollo ● Diciembre de 2019 (PDF)](/-/media/files/publications/fandd/article/2019/december/es/brazils-ilan-goldfajn-on-central-bank-communications-trenches.pdf){rel="external" type="application/pdf"} - **À contre-courant** - [À contre-courant (Markdown version)](/-/media/files/publications/fandd/article/2019/december/fr/brazils-ilan-goldfajn-on-central-bank-communications-trenches.pdf.md){rel="alternate" type="text/markdown"} - [À contre-courant (PDF)](/-/media/files/publications/fandd/article/2019/december/fr/brazils-ilan-goldfajn-on-central-bank-communications-trenches.pdf){rel="external" type="application/pdf"} - **На передовой. Плыть против течения – Финансы и развитие – декабрь 2019 года** - [На передовой. Плыть против течения – Финансы и развитие – декабрь 2019 года (Markdown version)](/-/media/files/publications/fandd/article/2019/december/ru/brazils-ilan-goldfajn-on-central-bank-communications-trenches.pdf.md){rel="alternate" type="text/markdown"} - [На передовой. Плыть против течения – Финансы и развитие – декабрь 2019 года (PDF)](/-/media/files/publications/fandd/article/2019/december/ru/brazils-ilan-goldfajn-on-central-bank-communications-trenches.pdf){rel="external" type="application/pdf"} - **Brazil’s Ilan Goldfajn on Central Bank Communications – IMF F&D | DECEMBER 2019** - [Brazil’s Ilan Goldfajn on Central Bank Communications – IMF F&D | DECEMBER 2019 (Markdown version)](/-/media/files/publications/fandd/article/2019/december/zh-do-not-use-rekia/brazils-ilan-goldfajn-on-central-bank-communications-trenches.pdf.md){rel="alternate" type="text/markdown"} - [Brazil’s Ilan Goldfajn on Central Bank Communications – IMF F&D | DECEMBER 2019 (PDF)](/-/media/files/publications/fandd/article/2019/december/zh-do-not-use-rekia/brazils-ilan-goldfajn-on-central-bank-communications-trenches.pdf){rel="external" type="application/pdf"} --- _Source: https://www.imf.org/en/publications/fandd/issues/2019/12/brazils-ilan-goldfajn-on-central-bank-communications-trenches_