SAO PAULO, Brazil –- Over the past two years, Brazil’s currency — the real — has been fortunate to experience an extraordinary run-up, and judging from market data, its gain may not be over yet.

The real gained 14 percent against the dollar in 2005, and then about 9 percent in 2006.

In May, the real reportedly broke the 2-to-1 barrier against the dollar for the first time in six years to run up another 8 percent in gains so far this year.

Given this, one news source opined, the end of the real’s run is hard to call.

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Experts on Brazil’s economy and currency offered various reasons for the real’s gains. A chief economist, for example, attributes it to the plethora of good news that’s come out about Brazil.

"Brazil gets a credit rating upgrade…the economy is growing faster than expected…inflation is only 3 percent; all these things feed into the exchange rate,” he was quoted.

Another expert cited the unusually high international market liquidity that’s benefited Brazil. That situation will endure, he said.

There’s still a third attraction — high interest rates.

Said one expert, "We’re not attracting dollars because of our merits. We’re attracting dollars because investors know there is little or no fixed-income risk in Brazil and interest rates are high.”

He added, "At current interest rates, the fixed-income window is still open to foreign investors.”

Still another offered that interest rates are only part of the reason behind the real’s gain. He cited improvement in Brazil’s trade and current account performance.

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