UPDATE 1-Brazil central bank chief set to leave post by year-end -Bloomberg

(Adds details of report, background)

RIO DE JANEIRO, Oct 18 (Reuters) - Brazil’s central bank chief Ilan Goldfajn is preparing to step down by the end of the year, Bloomberg reported on Thursday, depriving the country’s incoming president of a widely respected steward of the economy.

The central bank declined to comment on the report, which cited two people who spoke to Goldfajn about the matter and who asked to remain anonymous.

Bloomberg added that far-right presidential front-runner Jair Bolsonaro, who looks likely to be elected in an Oct. 28 runoff vote, was mulling several candidates for the central bank post.

Incoming presidents in Brazil typically replace the head of the central bank, who is not fully independent as is the case in many developed economies. President Michel Temer is due to step down on Jan. 1.

Nonetheless, Bolsonaro’s top economic adviser, Paulo Guedes, had previously said he was open to keeping Goldfajn, an investor darling, in the post.

Brazil’s benchmark Bovespa stock index extended losses in after-market trade following the Bloomberg report, while future contracts on the Brazilian real fell. Spot currency markets had already closed for the day.

Earlier this month, after the first-round vote, newspaper Folia de S. Paulo reported that Bolsonaro could invite the head of global markets at Santander Brasil SA to lead the central bank if Goldfajn declined to stay. (Reporting by Gabriel Stargardter and Marcela Ayres; Editing by David Gregorio and Tom Brown)