By Bruno Federowski
SAO PAULO Aug 19 (Reuters) - Brazil's Finance Minister Guido Mantega advised investors on Monday to avoid big bets against the real, saying they could lose money if the currency recovers from recent weakness.
He said the foreign exchange market has been under a lot of stress as U.S. Treasury yields rise, but said the situation in Brazil is "under control," with dollars flowing into the country's stock market and through foreign direct investment.
"Today we had a stressful situation originating mostly in the United States. There was an increase in speculation and investors migrated to short-dated bonds from long-dated bonds," he told reporters in Sao Paulo, referring to a sell-off in Brazil's currency and debt markets.
The Brazilian real closed 0.9 percent lower at 2.4152 per dollar, adding to last week's losses of more than 5 percent, even after strong central bank intervention.
Analysts said the real could keep weakening toward 2.5 per dollar in the short term, while others said it could slide to 2.70 through the end of the year.
But, repeating comments made by central bank chief Alexandre Tombini earlier on Monday, Mantega cautioned investors against making one-way bets on the currency.
"It's only natural that investors want to make money, but they could lose money in the future," he said, adding that Brazil has a free-floating exchange rate that "fluctuates in both directions."
Mantega said the government has several instrument to intervene in its currency market, including its $370 billion foreign reserves, and that the central bank and the Treasury are working together to stabilize financial markets.