The Brazilian real (Portuguese: real, pl. reais; sign: R$; code: BRL) is the official currency of Brazil. It is subdivided into 100 centavos. The Central Bank of Brazil is the central bank and the issuing authority.
The dollar-like sign (cifrão) is the currency's symbol (both historic and modern), and in all the other past Brazilian currencies, is officially written with two vertical strokes () rather than one. However Unicode considers the difference to be only a matter of font design, and does not have a separate code for the two-stroked version.
As of April 2016, the real is the nineteenth most traded currency in the world by value.
Video Brazilian real
History
The modern real (Portuguese plural reais or English plural reals) was introduced on 1 July 1994, during the presidency of Itamar Franco, when Rubens Ricupero was the Minister of Finance, as part of a broader plan to stabilize the Brazilian economy, known as the Plano Real. The new currency replaced the short-lived cruzeiro real (CR$). The reform included the demonetisation of the cruzeiro real and required a massive banknote replacement.
At its introduction, the real was defined to be equal to 1 unidade real de valor (URV, "real value unit") a non-circulating currency unit. At the same time the URV was defined to be worth 2750 cruzeiros reais, which was the average exchange rate of the U.S. dollar to the cruzeiro real on that day. As a consequence, the real was worth exactly one U.S. dollar as it was introduced. Combined with all previous currency changes in the country's history, this reform made the new real equal to 2.75 × 1018 (2.75 quintillions) of Brazil's original "réis".
Soon after its introduction, the real unexpectedly gained value against the U.S. dollar, due to large capital inflows in late 1994 and 1995. During that period it attained its maximum dollar value ever, about US$1.20. Between 1996 and 1998 the exchange rate was tightly controlled by the Central Bank of Brazil, so that the real depreciated slowly and smoothly in relation to the dollar, dropping from near 1:1 to about 1.2:1 by the end of 1998. In January 1999 the deterioration of the international markets, disrupted by the Russian default, forced the Central Bank, under its new president Arminio Fraga, to float the exchange rate. This decision produced a major devaluation, to a rate of almost R$2 : US$1.
In the following years, the currency's value against the dollar followed an erratic but mostly downwards path from 1999 until late 2002, when the prospect of the election of leftist candidate Luiz Inácio Lula da Silva, considered a radical populist by sectors of the financial markets, prompted another currency crisis and a spike in inflation. Many Brazilians feared another default on government debts or a resumption of heterodox economic policies, and rushed to exchange their reais into tangible assets or foreign currencies. In October 2002 the exchange rate reached its historic low of almost R$4 per US$1.
The crisis subsided once Lula took office, after he, his finance minister Antonio Palocci, and Arminio Fraga reaffirmed their intention to continue the orthodox macroeconomic policies of his predecessor (including inflation-targeting, primary fiscal surplus and floating exchange rate, as well as continued payments of the public debt). The value of the real in dollars continued to fluctuate but generally upwards, so that by 2005 the exchange was a little over R$2 : US$1. In May 2007, for the first time since 2001, the real became worth more than US$0.50 -- even though the Central Bank, concerned about its effect on the Brazilian economy, had tried to keep it below that symbolic threshold.
The exchange rate as of September 2015 was BRL 4.05 to USD 1.00, however it has since been in a gradual recovery period, reaching 3.0 BRL per USD by February 2017.
Maps Brazilian real
Coins
First series (1994-1997)
Along with the first series of currency, coins were introduced in denominations of 1, 5, 10 and 50 centavos and 1 real; the 25 centavos piece soon followed. All were struck in stainless steel. The original 1-real coins, produced only in 1994, were withdrawn from circulation on 23 December 2003; all other coins remain legal tender.
Second series (1998-present)
In 1998, a second series of coins was introduced. It featured copper-plated steel coins of 1 and 5 centavos, brass-plated steel coins of 10 and 25 centavos, a cupronickel 50 centavos coin, and a bi-coloured brass and cupronickel coin of 1 real. However, from 2002 onwards, steel was used for the 50 centavos coin and the central part of the 1 real coin.
In November 2005, the Central Bank discontinued the production of 1 centavo coins, but the existing ones continue to be legal tender. Retailers now generally round their prices to the next 5 or 10 centavos.
Commemorative coins
The Brazilian Central Bank has also issued special commemorative versions of some coins on special occasions. These coins are legal tender and differ from the standard ones only on the reverse side.
Banknotes
First series (1994-2010)
In 1994, banknotes were introduced in denominations of 1, 5, 10, 50 and 100 reais. These were followed by 2 reais in 2000 and 20 reais in 2001. On 31 December 2005, BCB discontinued the production of the 1 real banknote.
Second series (2010-present)
On 3 February 2010, the Central Bank of Brazil announced a new series of the real banknotes which would begin to be released in April 2010. The new design added security enhancements in an attempt to reduce counterfeiting. The notes have different sizes according to their values to help vision-impaired people. The changes were made reflecting the growth of the Brazilian economy and the need for a stronger and safer currency. The new banknotes began to enter circulation in December 2010, coexisting with the older ones.
Commemorative banknotes
In April 2000, in commemoration of the 500th anniversary of the Portuguese arrival on Brazilian shores, the Brazilian Central Bank released a polymer 10 real banknote that circulates along with the other banknotes above. The Brazilian Mint printed 250 million of these notes, which at the time accounted for about half of the 10 real banknotes in circulation.
Exchange rates
Historical exchange rate
Current exchange rates
See also
- Portuguese real
- Plano Real
- Economy of Brazil
- Central Bank of Brazil
References
External links
- Brazil's Currency War
- Images of historic and modern Brazilian bank notes
- The Invention of the Real (This American Life)
- Historical banknotes of Brazil
Source of article : Wikipedia
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