Sept. 27 (Bloomberg) -- Brazil's real may rise for a third day on speculation record exports and increased bond sales abroad will boost the amount of dollars available for trading.

The real has been the best performing currency against the dollar of the 16 major currencies in the last three months as lower global lending rates and the fastest domestic growth in eight years boost inflows, said Banco Santos SA's Rodrigo Boulos.

``We are still in a very positive trend,'' said Boulos, the head trader at Brazil's sixth-biggest commercial bank in a telephone interview from Sao Paulo. ``It's a combination of a strong financial and trade flows.''

The real was little changed at 2.8730 per dollar at 8:57 a.m. New York time from 2.8705 late Friday. The real has risen 8.3 percent since June 25, and has gained 1.9 percent in September, the third-best performance.

Brazil's currency has benefited from record exports, which will reach $94 billion this year, according to government forecasts, and an increase in bond overseas sales by the Brazilian government and companies such as steelmaker Cia. Siderurgica Nacional, Boulos said.

Bond sales in international markets this month by Brazilian companies is equivalent to 100 percent of debts maturing in September, Boulos said, compared to an average of about 40 percent to 50 percent over the past few months.

Rising inflows will help keep the real trading between 2.83- to-2.87 reais per U.S. dollar this week,

Inflation

Optimism inflation will slow after the central bank boosted the country's benchmark overnight target interest rate 0.25 percentage point from a three-year low of 16 percent may also help the Brazilian currency, Boulos said.

A survey of about 100 financial institutions conducted by the Brazilian central bank showed the median forecast for 2004 inflation fell to 7.34 percent from 7.37 percent a week ago.

Rising petroleum prices may limit gains by the currency, Boulos said, by hurting government efforts to slow inflation.

``Oil prices are the market's big doubt,'' Boulos said.

Crude oil rose for an eighth day, reaching a record $46.05 a barrel in London, on concern rebels may target output in Nigeria as U.S. refiners struggle to meet their needs after Hurricane Ivan curtailed supplies.

Brazil's benchmark bond maturing in 2040 fell 0.10 cent on the dollar to 111.75, boosting the yield to 9.26 percent, according to JPMorgan Chase & Co.

To contact the reporter on this story: Romina Nicaretta in Sao Paulo at at Rnicaretta@bloomberg.net

Last Updated: September 27, 2004 08:59 EDT