Brazilian real

Brazilian real
real brasileiro  (Portuguese)
100 reais banknote of the latest series, announced February 2010. Issued on December 13, 2010.[1][2]
ISO 4217 code	BRL
Central bank	Central Bank of Brazil
Website	www.bcb.gov.br
User(s)	Brazil
Inflation	5.84%, 2012
Source	Central Bank of Brazil
Method	CPI
Subunit
1/100	centavo
Symbol	R$
Plural	Reais
Coins
Freq. used	5, 10, 25, 50 centavos, R$1
Rarely used	1 centavo (discontinued in 2006)
Banknotes
Freq. used	R$2, R$5, R$10, R$20, R$50, R$100
Rarely used	R$1 (discontinued in 2006)
Printer	Casa da Moeda do Brasil
Website	www.casadamoeda.gov.br
Mint	Casa da Moeda do Brasil
Website	www.casadamoeda.gov.br

The real (/reɪˈɑːl/; Brazilian Portuguese: [ʁeˈaw]; pl. reais) is the present-day currency of Brazil. Its sign is R$ and its ISO code is BRL. It is subdivided into 100 centavos ("hundredths").

The modern real was introduced in 1994 as part of the Plano Real, a substantial monetary reform package that aimed to put an end to three decades of rampant inflation. At the time it was meant to have approximately fixed 1:1 exchange rate with the United States dollar. It suffered a sudden devaluation to a rate of about 2:1 in 1999, reached almost 4:1 in 2002, then partly recovered and has been approximately 2:1 since 2006. The exchange rate as of December 31, 2013 is BRL 2.36 to USD 1.00.

In Portuguese the word real means both "royal" and "real". The name of the historic real derived from the first sense. The name of the modern currency is generally understood to refer both to the historic unit and to the second sense.^{[citation needed]}

The dollar-like sign (cifrão) in 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.^[3] 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.^[4]

History

The modern real (plural reais) was introduced on July 1, 1994, during the presidency of Itamar Franco, when Fernando Henrique Cardoso 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 demonetization 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 x 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, 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.^[5]

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$1. In May 2007, for the first time since 1999, the real became worth more than US$ 0.50 — even though the Central Bank, concerned about its effect on the Brazilian economy, had tried to keep it below that symbolic threshold. But failing this the real continues to lose value, making it an undesirable currency.

Historical exchange rate (BRL:USD)

• 01 Jul 1994: 1.00
• 14 Oct 1994: 0.83
• 15 Feb 1995: 0.88
• 29 Dez 1995: 0.97
• 11 Jun 1996: 1.00
• 31 Dez 1996: 1.04
• 31 Dez 1997: 1.12
• 31 Dez 1998: 1.20
• 12 Jan 1999: 1.21
• 13 Jan 1999: 1.31
• 29 Jan 1999: 1.98
• 03 Mar 1999: 2.16
• 30 Apr 1999: 1.66
• 31 Dez 1999: 1.78
• 31 Dez 2000: 1.96
• 02 May 2001: 2.23
• 15 Oct 2001: 2.78
• 25 Jan 2002: 2.38
• 12 Apr 2002: 2.27
• 27 Jun 2002: 2.83
• 30 Sep 2002: 3.87
• 12 Oct 2002: 3.93
• 22 Oct 2002: 3.96
• 27 Dec 2002: 3.53
• 18 Feb 2003: 3.61
• 28 Jun 2003: 2.87
• 30 Sep 2003: 2.93
• 28 Dec 2003: 2.93
• 31 Mar 2004: 2.91
• 23 May 2004: 3.18
• 28 Jun 2004: 3.10
• 30 Sep 2004: 2.85
• 28 Dec 2004: 2.69
• 19 Feb 2005: 2.56
• 26 Mar 2005: 2.73
• 28 Jun 2005: 2.38
• 25 Sep 2005: 2.26
• 11 Nov 2005: 2.17
• 28 Dec 2005: 2.36
• 27 Mar 2006: 2.15
• 7 May 2006: 2.05
• 29 Dec 2006: 2.13
• 7 Nov 2007: 1.73
• 1 Aug 2008: 1.56
• 3 Mar 2009: 2.42
• 14 Oct 2009: 1.71
• 30 Dez 2010: 1.66
• 23 Jul 2011: 1.53
• 18 Mar 2012: 1.79
• 19 Aug 2012: 2.01
• 31 Mar 2013: 2.01
• 13 Jul 2013: 2.26
• 01 Nov 2013: 2.23
• 23 Jan 2014: 2.40
• 03 Feb 2014: 2.44
• 06 Feb 2014: 2.40

Users

Brazil, and sometimes used in bordering countries, especially Brazil-Uruguay and Brazil-Paraguay borders in which every year millions of Brazilians go shopping at the duty free stores etc.

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 dated 1994-1997 have been withdrawn from circulation since December 31, 1997; all other coins remain legal tender.

Second series (1998-)

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 the 1 real coin on special occasions. These coins are legal tender and differ from the standard ones only on the reverse side.

Banknotes

Original series

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 December 31, 2005, BCB discontinued the production of the 1 real banknote, but it remains legal tender.

Polymer 10 real note

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.

This note contains a more complex design, as follows: Obverse:

• Image of Pedro Álvares Cabral, the Portuguese sea captain;
• A representation of the map "Terra Brasilis", one of the earliest drawings of the land;
• A passage from Pero Vaz de Caminha's letter to King Manuel I of Portugal, the first known description of Brazil;
• A 16th-century Portuguese Rose of Winds;
• To the right of the map, five ships from Cabral's expedition appear;
• In the background, decorative elements from Portuguese tiles can be seen;
• The white area around the red dot is actually transparent (the red dot is translucent);
• Finally, also in the background, the Cross from the Order of Christ, which was present in all Portuguese ships of the time, appears.

Reverse: A stylized map of Brazil with photographs depicting the ethnic variety of the Brazilian people (white, black, and amerindian).

New series

Banknotes in the new series

On February 3, 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.^[7][8]

"God Be Praised" controversy

Since 1986, Brazilian bank notes contain the words “Deus Seja Louvado” (God Be Praised). In 2012, a federal prosecutor from São Paulo sought a court order to force the central bank to replace the nation’s entire supply of paper currency with bills that do not display these words, arguing that Brazil is a secular state and that this phrase violates the rights of non-Christians and nonbelievers. The Bank responded by stating that the preamble to the Brazilian constitution explicitly states that the democracy was formed “under the protection of God”, and that the state, “not being atheist, anticlerical or antireligious, can legitimately make a reference to the existence of a higher being, a divinity, as long as, in doing so, it does not make an allusion to a specific religious doctrine.”^[9]

Current Real exchange rates

See also

• Portuguese real
• Plano Real
• Economy of Brazil

References

External links

Wikimedia Commons has media related to Real.

• Brazil's Currency War
• Images of historic and modern Brazilian bank notes
• The Invention of the Real (This American Life)

v t e Historical currencies of Brazil Real (Réis) Rs [—] 1790–1942 Cruzeiro Cr / ₢ [BRZ] 1942–1967 Cruzeiro (novo) NCr / Cr$ [BRB] 1967–1986 Cruzado Cz$ [BRC] 1986–1989 Cruzado novo NCz$ [BRN] 1989–1990 Cruzeiro Cr$ [BRE] 1990–1993 Cruzeiro real CR$ [BRR] 1993–1994 Real R$ [BRL] 1994–present