Nov. 5 (Bloomberg) -- Brazilian Finance Minister Guido Mantega said the country’s 2 percent tax on some capital inflows will help prevent the formation of an asset “bubble.”

Brazil last month slapped a levy on foreign purchases of equities and fixed-income securities in a bid to fend off “excess speculation.” The country’s currency and stocks have had world-beating rallies this year.

The so-called IOF levy has been “sufficient” in eliminating “excessive interest in Brazil capital markets, Mantega said an interview with Bloomberg Television in London today. He is attending the FT Investing in Brazil Summit today.

Brazilian central bank President Henrique Meirelles said yesterday “exuberant” investors could create an asset bubble in Latin America’s biggest economy. Faster economic growth, higher commodity prices, and an investment grade by Moody’s on Sep. 22 have attracted foreign investors.

The Bovespa Stock Index has gained almost 130 percent in dollar terms this year, including a 2 percent climb yesterday to 63,912.57.

The real has gained 34 percent this year -- the best performance among the 16 most-traded currencies tracked by Bloomberg. It weakened 0.3 percent today to trade at 1.7265 per dollar at 8:16 a.m. New York time.

To contact the reporter on this story: Laura Price in London at lprice3@bloomberg.netJuan Pablo Spinetto in London at jspinetto@bloomberg.net

Last Updated: November 5, 2009 08:30 EST