By Samantha Pearson

SAO PAULO, Sept 10 (Reuters) – Brazil is locked in a bitter struggle with investors over the value of its currency — a battle it is unlikely to win without major casualties.

The government is increasingly desperate to halt the appreciation of the real, which has more than doubled in value against the dollar since President Luiz Inacio Lula da Silva took office in 2003 and is now, by one measure, the world’s most overvalued major currency.

The currency’s rise is in part a reflection of Lula’s success in transforming Brazil into a darling of foreign investors. Yet what was once seen as a blessing has become a curse, and Finance Minister Guido Mantega warned Thursday that the government will take whatever measures are necessary to keep the real from further damaging exporters.

Meanwhile, the central bank has resorted to unusual, multiple interventions in the market this week to try to keep the real at or above its current level of 1.72 per dollar, near its strongest level this year.

Yet Brazil’s government and monetary authority may very well be outgunned in the near-term by a host of economic fundamentals and one-off events, namely the $65 billion share offering planned by state oil company Petrobras later this month. Analysts say that could unleash further deals and yet another wave of foreign investment inflows.