Brazil's Lula Inches Closer to Prison After Court Ruling

(Bloomberg) -- A superior court in Brazil denied former President Luiz Inacio Lula da Silva’s request for a preventative habeas corpus, bringing the popular leader a step closer to serving a prison sentence.

All five judges at the Superior Court of Justice, known as STJ, on Tuesday voted against Lula, who filed the request after an appeals court in January upheld his graft conviction and increased his prison sentence to over 12 years.

With the former union leader still pursuing other legal challenges, the timing of an imprisonment remains unclear. Yet the decision further complicates his bid to return to the helm of Latin America’s largest economy even as he leads opinion polls showing voter intention.

Lula has pledged to undo many of the market-friendly policies undertaken by the current administration. Tuesday’s court ruling diminishing chances of a comeback helped boost Brazil’s currency, the real, in afternoon trading, said Paulo Nepomuceno, a fixed-income strategist at brokerage Coinvalores CCVM in Sao Paulo.

"With every day that goes by, it looks more like Lula won’t be a candidate," Nepomuceno said in a phone interview.

Public opinion surveys for this October’s election show the former head of state, who has lambasted the current administration’s market-friendly policies, as a clear favorite. His definitive removal from the race would leave the field wide open among a slew of other possible contenders.

An MDA poll published by the National Transportation Confederation on Tuesday showed Lula with 33.4 of voting intentions, up from 32 percent in September.

Lula has repeatedly denied allegations of wrongdoing, and has described the charges as politically motivated.

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