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. Last Updated: 07/27/2016

Brazil Fires Chief Of Central Bank

BRASILIA, Brazil -- Brazil's Finance Ministry dismissed the president of the nation's Central Bank on Tuesday, less than one month after he was nominated to the post.

The removal of Francisco Lopes, who had devalued Brazil's currency immediately after taking office last month, was part of "changes being made in the Central Bank's board of directors to strengthen the institution in view of the recent changes made in the country's foreign exchange policies,'' the Finance Ministry said in a statement.

The action, it said, does not "represent any alteration in the current floating exchange-rate system nor in the overall economic policy guidelines, which will be maintained.''

Lopes will be replaced by Arminio Fraga, who works for the Soros Foundation, according to the statement. Fraga will serve as a special adviser to the Finance Ministry until he is confirmed by the Senate.

Until Fraga is confirmed, Demostenes Madureira de Pinho will serve as interim president of the bank. Madureira is now the bank's director of international affairs.

Just after being appointed bank president Jan. 13, Lopes allowed Brazil's currency, the real, to devalue. A few days later he said the government would no longer prop up the battered currency and would instead allow it to float freely.

The ministry said Fraga, who has a doctorate from Princeton University, is no longer associated with George Soros or the global financier's foundation.

At a news conference, Finance Minister Pedro Malan said he and Lopes had offered to step down amid the economic turmoil facing Brazil but that President Fernando Henrique Cardoso refused to accept Malan's resignation.

Malan said the appointment of Fraga, "one of Brazil's best economists,'' was in line with the current direction of the country's economic policy.

He added that Fraga's views don't necessarily correspond with those of Soros, who has been a sharp critic of Brazil's high interest rates.

The dismissal coincided with the start of earnest talks between Brazil and the International Monetary Fund to cement stability in the Latin American giant.

The fund's first deputy managing director, Stanley Fischer, was due to meet Malan. He planned to then join an IMF team in the capital, Bras?lia, for the last two days to prepare the groundwork.

"The arrival of the IMF's second in command, Stanley Fischer, will make the talks more substantial," Malan's deputy Pedro Parente said late Monday.

Under Fischer's guidance, the IMF and Brazil's economic team will begin discussing how the nation will manage its newly floated currency to avoid the wild fluctuations after the government left the real's fate to the market on Jan. 15.

By Wednesday, the two sides are expected to hammer out new targets on the budget deficit and interest rates and pave the way for a transfer of about $9 billion to Brazil.

In November, the IMF assembled a $41.5 billion loan package to help Brazil avoid a Russia-style financial collapse in exchange for a three-year fiscal austerity package.