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Chile's outgoing President Sebastian Pinera tapped Rosanna Costa as the nation's first female central bank chief, putting her in charge of policy makers' aggressive campaign against inflation.
Costa, currently a board member, was nominated due to her experience and support for inflation control and the nation's economic development, according to a statement from the presidency Thursday.
She replaces Mario Marcel, who will be finance minister in the incoming Gabriel Boric government. Marcel had served as central bank head since 2016.
Chile's central bank is on track to continue raising its interest rate even amid the leadership changes. Aside from Marcel's departure, Luis Felipe Cespedes will join the board this month after the outgoing bank vice president's term ends, and a new director must now be named for Costa's spot. Policy makers are battling annual inflation that's running at the fastest pace since 2008.
Read More: Chile's Boric Picks Central Bank Head Marcel as Finance Boss
Costa was appointed to the bank board in 2017 and is known to be close to Pinera. Prior to re-joining the monetary authority, she was deputy director at Instituto Libertad y Desarrollo, a conservative think tank.
From 1984 to 1992, she worked as a central bank economist in the areas of national accounts, research and monetary policy. Costa has a bachelor's degree in business administration with a minor in economics from Pontificia Universidad Catolica de Chile.
‘Natural Transition'
She has been called on frequently to represent the bank at conferences and in official communications, such as presentations of quarterly monetary policy reports. Having Costa assume bank leadership represents a “natural transition,” according to a Jan. 21 Credicorp Capital report.
Many investors and Chile watchers had expected Pinera to tap Costa as bank head last year, instead of opting to nominate Marcel for another term.
BE Primer: Adjustment Needed, Challenging 2022 Outlook for Chile
Costa will oversee the bank's response to price pressures from billions of dollars in local measures against Covid-19, as well as global supply shocks and costlier commodities. Both economists and traders surveyed by the monetary authority see inflation above the 3% target through the next two years.
At the same time, the combination of higher rates, political uncertainty from a new constitution and the wind-down of stimulus will drag on activity. The economy likely expanded near a record 12% in 2021, according to bank estimates from December, though growth this year will be closer to 2%.
Costa will also represent the bank as Chile's Constitutional Assembly finishes work on new charter, which will be put to a national referendum later this year. Investors are paying close attention to see if the new laws bring any changes to the institution's autonomy, make-up or mission.
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