By Marcela Ayres, Bernardo Caram and Lisandra Paraguassu

BRASILIA (Reuters) – Brazil’s Senate Economic Affairs Committee (CAE) will not hold a confirmation hearing next week for the candidate chosen by President Luiz Inacio Lula da Silva to head the central bank, the committee’s chair said.

“It can wait. It won’t happen next week, I guarantee that,” Senator Vanderlan Cardoso told Reuters on Monday night.

Cardoso explained that discussions between the Senate and the government are currently sensitive, stating, “We need the right moment, when discussions between the Senate and the government are better. Right now, we’re in a slightly delicate moment.”

He also noted that the government has not yet presented any names for the central bank and expressed hope that the situation may improve post the first round of municipal elections in early October, potentially leading to quicker Senate approvals.

Cardoso highlighted that the government did not honor an agreement regarding a legislative decree to ease gun ownership rules, which has contributed to a growing sense of unease. Resolving this issue could improve the atmosphere for future nominations.

In practice, the confirmation process is expected to take longer than the government initially suggested. Finance Minister Fernando Haddad mentioned in mid-August that addressing the central bank leadership was on Lula’s agenda for “the coming weeks.”

Anonymous government sources told Reuters that rushing the nomination might distract from the next central bank chief’s confirmation, especially since Lula’s pick will only take office early next year, reducing Roberto Campos Neto’s statements’ impact.

Lula, who has openly criticized Campos Neto since taking office, must appoint a replacement and new directors for regulation and institutional relations, who will also start their terms in January 2025.

Widespread expectation suggests that current monetary policy director Gabriel Galipolo may be chosen to lead the central bank. This would also necessitate filling his current vacancy in a broader reshuffle.

Additionally, sources indicated the government is reconsidering the timing of Lula’s announcements regarding central bank appointments after senators recommended waiting, noting that fewer senators are present in Brasilia due to the ongoing election period.

One source remarked that disputes between government branches over parliamentary appropriations could negatively affect the atmosphere surrounding confirmation hearings.