UPDATE 1-Brazil central bank taps Nomura economist for board

jueves 5 de febrero de 2015 18:44 GYT

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By Flavia Bohone and Silvio Cascione

SAO PAULO/BRASILIA Feb 5 (Reuters) - Brazil's central bank chief, Alexandre Tombini, tapped a vocal critic to sit on the bank's board on Thursday, the latest effort by President Dilma Rousseff's government to win back skeptics in the financial markets.

Tombini nominated Tony Volpon, the head of emerging market research in the Americas for Nomura Securities International, as director of international affairs.

Volpon has criticized the central bank's currency interventions, called out Rousseff for profligate spending and argued against Brazil's use of capital controls. He warned as recently as October that a newly reelected Rousseff's honeymoon with markets could be "short and ultimately frustrating."

Brazil's central bank is working to burnish its inflation-fighting credentials since an ill-fated effort to cut interest rates, starting in 2011, which fanned inflation without delivering the economic rebound promised by the government.

"There is little doubt that the policy experiment of 2011-2012 failed," Volpon wrote to clients a year ago.

"Unfortunately, the government engineered a massive loosening of fiscal policy and imposed capital controls in a bid to weaken (the currency) ... Could anyone really be surprised that all that happened was higher inflation?"

Anchoring inflation expectations will be key for the central bank as it faces a series of price shocks this year from rising energy prices to concerns about power and water rationing.   Continuación...