SAO PAULO/BRASILIA (Reuters) - Respected Brazilian banking executive Joaquim Levy is among three finalists to become the country's next finance minister, and President Dilma Rousseff could announce her pick later on Friday, a government official said.
Investors hope Rousseff will name a market-friendly figure such as Levy, who would signal a shift away from the leftist, interventionist policies they blame for Brazil's stagnant economic growth in recent years.
The other contenders are central bank president Alexandre Tombini and Nelson Barbosa, a former number-two official at the finance ministry, the official said on condition of anonymity.
At this time, Rousseff favors leaving Tombini at the central bank, said another official close to the deliberations.
Levy is chief executive officer of Bradesco Asset Management, an arm of Banco Bradesco SA, the nation's second-largest private-sector bank. He was also the treasury chief during the first term of Rousseff's predecessor and political mentor, Luiz Inácio Lula da Silva.
Levy was a last-minute addition to the race after his colleague Luiz Carlos Trabuco, Banco Bradesco's CEO, reportedly turned down the ministry job on Thursday.
Still, Levy is widely respected among investors for being a fiscal conservative. Brazilian stock and currency markets rallied on Thursday on the chance that Rousseff will pick him for the job.
Brazil's benchmark Bovespa stock index surged 3 percent while Brazilian real gained nearly 2 percent.
"Levy is well known as an orthodox and pro-market policymaker who should help in the hard task of economic adjustment," Tony Volpon, head of emerging market research for Nomura Securities, wrote in a note to clients.
The University of Chicago-trained economist is considered a fiscal hawk who helped Brazil obtain its investment credit grade as treasury secretary, by keeping spending in check and overhauling its debt structure.
As minister, he would likely push for more transparency in fiscal accounts, which have deteriorated under Rousseff and raised the specter of a debt downgrade.
Tombini and Barbosa are both seen as more moderate than current Finance Minister Guido Mantega, but their appointment to the ministry would likely signal relative policy continuity.
Reporting by Brian Winter and Luciana Otoni; Editing by Bernadette Baum and Nick Zieminski