Circular No. 2.780

CIRCULAR N. 002780 ------------------ Establishes the period of validity of the Basic Rate of the Central Bank (TBC) and of the Central Bank Assistance Rate (TBAN) and approves the new Regulation of the Monetary Policy Committee (COPOM). The Collegiate Board of the Central Bank of Brazil, in a session held on 12.11.97, based on art. 10 of Law No. 4.595, of 31.12.64, D E C I D E D: Art. 1º To maintain the Basic Rate of the Central Bank (TBC) and the Monetary Policy Committee (COPOM), created by Circular No. 2.698, of 20.06.96, and the Central Bank Assistance Rate (TBAN), created by Circular No. 2.711, of 28.08.96. Art. 2º To establish that the period of validity of the TBC and the TBAN shall begin on the business day following each COPOM meeting. Art. 3º To approve the annexed Regulation that establishes the objective, structure, functioning, and attributions and competencies of the COPOM. Art. 4º This Circular enters into force on the date of its publication, producing effect as from 02.01.98, inclusive, on which date Circular No. 2.761, of 18.06.97, shall also produce effect, and when Circulars No. 2.698, of 20.06.96, and 2.711, of 28.08.96, shall be revoked. Brasília, 12 November 1997 Francisco Lafaiete de Pádua Lopes Director Regulation annexed to Circular No. 2.780, of 12.11.97. Chapter I OBJECTIVE Art. 1º The Monetary Policy Committee (COPOM), constituted within the scope of the Central Bank of Brazil, has the objective of establishing guidelines for monetary policy and defining the Basic Rate of the Central Bank (TBC) and the Central Bank Assistance Rate (TBAN). Chapter II STRUCTURE AND FUNCTIONING Art. 2º The composition of the COPOM shall be as follows: I - President; II - Directors; III - Head of the Economic Department (DEPEC); IV - Head of the International Operations Department (DEPIN); V - Head of the Open Market Operations Department (DEMAB); VI - Head of the Banking Operations Department (DEBAN). Paragraph 1º The President and the Directors shall have the right to vote. Paragraph 2º In the absence of the Heads of Units, their substitutes at the COPOM meetings shall have the same responsibilities and shall be designated by the Directors of the respective areas. Art. 3º The TBC and the TBAN shall be set by the COPOM. Paragraph 1º The COPOM shall meet ordinarily at least six times per year and, extraordinarily, whenever necessary, upon convocation by its President. Paragraph 2º The calendar of ordinary meetings scheduled for the following year shall be disclosed by the month of November of each year. Chapter III ATTRIBUTIONS AND COMPETENCIES Art. 4º The members of the COPOM shall exercise the following attributions and competencies: I - President of the Bank: to preside over the meetings and, at the end, to put the matter to vote, as well as to decide, with a casting vote; II - Head of DEPEC: to present an analysis of the economic situation, covering inflation, level of activity, evolution of monetary aggregates, public finances and
balance of payments; III - Head of DEPIN: to report on the external environment, the evolution of the foreign exchange market, the operations of the Central Bank of Brazil and international reserves; IV - Head of DEBAN: to discuss the state of banking liquidity; V - Head of DEMAB: to report on the money market and on open market operations; VI - Director responsible for matters relating to Monetary Policy: to present suggestions on monetary policy guidelines and a proposal for the definition of the TBC and the TBAN; VII - President and Collegiate Board: to evaluate the proposals, add propositions on the issues presented and define, by means of a vote, the TBC and the TBAN. Paragraph 1º Whenever necessary, other Heads of Unit may be invited to discuss matters of their areas. Paragraph 2º The Director responsible for matters relating to Monetary Policy shall disclose the decisions taken by the COPOM. Paragraph 3º The Consultant to the Director responsible for matters relating to Monetary Policy shall be responsible for providing secretariat services for the meetings, preparing the respective minutes and forwarding, for disclosure, the decisions emanating from the COPOM. Art. 5º The disclosure of the decisions emanating from the COPOM shall occur by means of the issuance of a communiqué. Chapter IV GENERAL PROVISIONS Art. 6º The Collegiate Board shall be responsible for deciding on omitted cases and amendments to this Regulation. .o0o.