Brazilian Finance Minister Guido Mantega said the government won’t allow the real to over appreciate after the currency strengthened to a nine-month high. “We will not allow for an over appreciation of the real,� Mantega said in an interview in Moscow today, adding that the government isn’t thinking of a specific level. “We won’t tolerate abnormal fluctuations.� Brazil’s real appreciated 0.4 percent to 1.9582 per dollar at close in Sao Paulo, the strongest level since May 10, on speculation the government will allow the currency to appreciate to contain inflation that’s running above the target for 29 months. A drop in U.S. jobless claims also fostered demand for emerging-market assets. Speculation that Brazil was changing policy and seeking a stronger currency to help tame inflation started last month after the central bank surprised the markets with an intervention in swaps to prop up the real. The real rallied to a level stronger than 2 per dollar on Jan. 28 for the first time since July after the central bank renewed $1.85 billion of currency swaps about to expire, refraining from buying dollars to settle the contracts. On Jan. 31, the government exempted foreigners from a tax on real-estate funds traded on the stock exchange, spurring speculation that inflows will help sustain the real. “It is clear that the central bank does not want a very weak real,� Darwin Dib, the chief economist at CM Capital Markets Asset Management, said by phone from Sao Paulo. The central bank swung in 2012 between selling currency swaps to prevent the real from falling too quickly and offering reverse currency swaps to protect exporters by keeping the real from strengthening beyond 2 per U.S. dollar. To contact the reporter on this story: Raymond Colitt in Brasilia Newsroom at rcolitt@bloomberg.net To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

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