UPDATE 4-Brazil government taps Wall Street favorite to head central bank
(Adds state bank appointments, state financing to be curbed)
By Alonso Soto
BRASILIA May 17 (Reuters) - Brazil's interim government on Tuesday named the lead economist of the nation's largest private bank to head the central bank, in a further shift away from interventionist policies that many blame for a deep recession and near double-digit inflation.
Ilan Goldfajn, chief economist of Itau Unibanco Holding SA , will replace Alexandre Tombini as central bank governor, Finance Minister Henrique Meirelles said in a briefing where he named other respected economists to his economic team.
Goldfajn, 50, has been widely praised on Wall Street for his orthodox approach to economics and is expected by investors to be less vulnerable to political interference than Tombini, a career technocrat appointed by the previous leftist government.
An Israel-born graduate of MIT, Goldfajn has said Brazil urgently needs to rebalance its fiscal accounts with pension reforms and public spending caps to slow inflation and snap it out of what is believed to be its worst recession in a century.
He recently warned against a hasty interest rate cut while acknowledging that slowing inflation would clear the way for monetary policy easing, probably starting in July.
Brazil's inflation rate is running at just under 10 percent.
"Ilan may have leaned toward the dovish camp in the past but under the current circumstances, I have no doubt that he will strive to deliver inflation on target," said a former central bank colleague who spoke on condition of anonymity. Continuación...