Lula's inner circle sees Meirelles' chances at the Finance Ministry as "close to zero," amid market support.

BRASILIA (Reuters) - Sources close to former President Luiz Inácio Lula da Silva denied that Henrique Meirelles had been chosen to head the Finance Ministry should the Workers' Party candidate win the elections this month, after speculation to that effect contributed to a strong appreciation of the real on Friday.

Speaking on condition of anonymity, a source close to the former president said that Lula has given clear signs that his choice for the Finance Ministry leadership "is going in the opposite direction."

"This is either planted or something to target a voter of (Simone) Tebet," said the source, who is involved in discussions about the campaign's economy. "I would say the chances are close to zero," he added.

Two other sources very close to Lula also assure that the information is incorrect. According to one of them, very close to the former president, he was directly asked about the possibility of having Meirelles at the Finance Ministry and his response was that it was never good to repeat the past.

Meirelles was president of the Central Bank during Lula's two terms (2003-2011) and headed the Ministry of Finance in Michel Temer's government (2016-2018).

Veja magazine published a note this Friday stating that the announcement of Meirelles' nomination for Finance Minister would be made in the coming weeks by the Workers' Party candidate, who leads in the polls, regardless of whether Lula wins in the first round this Sunday.

The dollar, which was trading with volatility amid pre-election caution and the currency's appreciation abroad, fell as much as 1,20% against the real before reducing its losses, with investors assessing that Meirelles' name would be an indication of commitment to fiscal responsibility in a potential Lula government.

Last month, the market also reacted positively to Meirelles' name, after the former minister participated in an event where other former presidential candidates declared their support for Lula and left the door open to returning to the government in case of a victory for the Workers' Party candidate.

The third source from the Workers' Party campaign, also very close to Lula, assures, however, that the former president never mentioned any name for any ministry, much less for the Finance Ministry.

"He doesn't talk about that. Never," he stated.

In an interview this afternoon with TC Rádio, from Traders Club, an investor platform, Meirelles denied having received a direct invitation to participate in Lula's government.

Both privately and at public events, Lula has stated that, should he win the elections, he wants a politician to head the Ministry of Finance, noting that the final choice will only be made after the election results.

In the betting pool, names like the vice-presidential candidate and former governor of São Paulo, Geraldo Alckmin, and members of the PT (Workers' Party) such as the governor of Bahia, Rui Costa, the former governor of Piauí, Wellington Dias, federal deputy Alexandre Padilha, and Fernando Haddad, the current candidate for governor of São Paulo, should he not win the state election, are being considered.

Outside of the PT, another candidate being considered is Josué Gomes, president of the Federation of Industries of the State of São Paulo (Fiesp) and son of José Alencar, Lula's former vice-president who died in 2011.

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