Central banks across the world face different sets of laws regarding their governance structures, their autonomy, and the scope of their powers and responsibilities. In the last two decades, many countries have passed laws granting their central banks legal independence from government. Without central bank independence, inflation can be undesirably high for two main reasons.
Currently, Brazil’s central bank is not legally independent. The central bank president has no fixed term length and can be fired by the Brazilian president.
September 26, 2014