* Brazilian currency valuation a concern for government

* Foreign investment welcome, but not "exaggerated" inflow (Recasts, adds background, quote)

SAO PAULO, Nov 10 (Reuters) - Brazil's government is concerned about the overvaluation of its currency, which has worried exporters and others who see the gains threatening the country's international trade, Finance Minister Guido Mantega said on Tuesday.

Brazil welcomes foreign investments in the stock market, in direct investment and more, but "we don't want exaggerated inflows," he said at a televised event in Sao Paulo. "We now have an overvaluation of the Brazilian currency."

Brazil's real (BRBY: Quote, Profile, Research) has gained about 36 percent against the dollar so far this year, as the country returned to growth in the second quarter, ahead of many more developed economies.

The benchmark Bovespa stock index .BVSP has jumped even more, notching gains of better than 76 percent in 2009 through Monday's close.

The gains came on the back of huge dollar inflows, as investors flocked to Brazil, an emerging economy that many see as a world power in the making.

October inflows were the highest since June 2007, totaling nearly $14.6 billion.

The government has already tried to contain the currency's gains, but to little effect. In October, Brazil instituted a 2 percent tax on inflows into stocks and fixed-income investments.