* Brazil monitoring impact of tax on foreign investment
* May impose other measures if tax fails to curb FX gains (Recasts with quotes from finance minister, adds byline)
By Walter Brandimarte
NEW YORK, Oct 12 (Reuters) - Brazil has "a lot of ammunition" to intervene in its foreign exchange market if a recent increase in taxes on foreign investment fails to curb the strength of its currency, the real, Finance Minister Guido Mantega said on Tuesday.
Mantega considered it too early to gauge the currency impact of the government's decision to double to 4 percent the IOF tax on foreign investment in domestic sovereign bonds.
"At this moment we're waiting to see if the currency will stabilize. It's possible that it happens," he told reporters at the Council of the Americas. Earlier, in a presentation to investors, he said the tax had been successful in curbing currency gains when it was introduced last year.
"If it doesn't work this time, we will be thinking about other measures," Mantega said.
He said Brazil's sovereign wealth fund is "ready to buy dollars" but hasn't done so yet because, for now, the central bank has been acquiring enough dollars from the market.
Mantega, who attended the semi-annual meeting of the International Monetary Fund in Washington over the weekend, repeated his call for coordinated international action to rebalance the global economy and stop an ongoing "currency war (from turning) into a trade war."
He urged strong, developed economies to resort to more fiscal stimulus rather than monetary policy to boost domestic consumption and criticized the U.S. Federal Reserve for "considering more quantitative easing" to boost the economy.
"I don't think it will reactivate the economy, but it will weaken the dollar," he said. (Editing by James Dalgleish)