Brazil central bank head 'ousted' as inflation rises

Henrique Meirelles
Image caption Henrique Meirelles removal was widely anticipated following the Brazilian presidential election result

Brazil's hawkish central bank head, Henrique Meirelles, is to be replaced, a local newspaper has said.

His successor will be the central bank's financial regulation head, Alexandre Tombini, according to a report in Folha de Sao Paulo.

The widely expected move by recently elected President Dilma Rousseff may pave the way for interest rate cuts.

Yet data released on Tuesday showed that inflation is on the rise again, hitting 5.47% in November.

This is well above the central bank's year-end target of 4.5%.

The choice of Mr Tombini, an economist, from within the bank's ranks may provide some reassurance to financial markets that President Rousseff will not push as aggressively as previously feared for looser monetary policy.

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