Brazil to mull forex steps after investment grade

BRASILIA, May 31 (Reuters) - Brazil's rallying currency, the real, should get a further boost when Brazil reaches coveted investment-grade status and the government may then need to take extra measures to stem the rise, Finance Minister Guido Mantega said on Thursday.

Mantega told reporters the real's BRBY 0.82 percent rise to the strongest level since November 2000 on Thursday was helped by expectations that Latin America's largest economy will become an investment-grade country soon.

When credit rating agencies rate Brazil investment grade, the inflows of dollars should grow, propping the national currency up, he said.

Brazil's sovereign rating is just one notch below the key grade and Wall Street banks forecast Brazil may join the investment-grade club next year, although it could happen even earlier.

"Then we'll think how it's going to be, what we are going to do," Mantega said, adding that recent examples of countries like Russia or Colombia, which took steps to prevent their currencies from apppreciating too much, did not serve for Brazil.

In the meantime, he said regular central bank dollar purchases to boost international reserves and interest rate cuts should at least put the breaks on the real's rally.

"We face strong pressure (to act), but, as I always say, we have a floating exchange rate. Now it (the dollar) is fluctuating downward, but at any moment it may fluctuate upward," Mantega said.

The real finished at 1.926 per dollar on Thursday. It has traded below the 2 per dollar mark since May 15. It gained some 5 percent during the month.