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Brazil's Rousseff 'close' to naming finance minister, official says

Published 19/11/2014, 13:59
© Reuters. Brazil's President Dilma Rousseff reacts during a meeting with leaders of the Social Democratic Party (PSD) at the Planalto Palace in Brasilia
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By Brian Winter

SAO PAULO (Reuters) - Brazil's President Dilma Rousseff is "close" to naming a new finance minister, a government official said on Wednesday, a pick that will help define whether she takes a more market-friendly approach to the struggling economy in her second term or doubles down on leftist policies.

The official, who spoke on condition of anonymity, declined to say exactly when the decision would be announced or who would be chosen to replace departing Finance Minister Guido Mantega.

"It's probably the most important decision she'll make for the rest of her presidency," the official said, explaining why Rousseff has waited so long after winning reelection on Oct. 26 to announce the pick.

Some investors have speculated the announcement could come as soon as Wednesday, since Thursday is a market holiday in most of Brazil and would give investors time to digest the pick.

Rousseff had said she would name Mantega's successor sometime after returning from a summit last week in Australia. She returned on Monday, and spent most of Tuesday huddled with her closest aide, Chief of Staff Aloizio Mercadante.

Pressure has mounted on Rousseff to make the pick, as a growing bribery scandal involving state-run oil company Petroleo Brasileiro SA (SA:PETR4) threatens to overshadow her second term and hurt the already stagnant economy.

Most investors are hoping she will choose Henrique Meirelles, a former Wall Street executive and central bank president from 2003 to 2010 who would signal more emphasis on austerity and subduing high inflation.

Rousseff is also considering current central bank chief Alexandre Tombini and Mantega's former top aide Nelson Barbosa, officials say. Both of them would signal greater policy continuity and likely disappoint some investors.

© Reuters. Brazil's President Dilma Rousseff reacts during a meeting with leaders of the Social Democratic Party (PSD) at the Planalto Palace in Brasilia

Brazil's currency has fallen to nine-year lows in recent days and the stock market has wobbled as investors speculate over who will take the job.

(Editing by W Simon)

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