Unidad de Fomento

Unidad de Fomento
ISO 4217 code CLF
Central bank Banco Central de Chile
 Website www.bcentral.cl
User(s) Chile
Inflation Inflation adjusted
Symbol UF
Plural Unidades de fomento
Coins
 Freq. used No coins
Banknotes No banknotes
Mint No mint

The Unidad de Fomento (UF) is a Unit of account that is used in Chile. The exchange rate between the UF and the Chilean peso is now (today) constantly adjusted to inflation so that the value of the Unidad de Fomento remains constant on a daily basis during low inflation.

It was created on January 20, 1968, for the use in determining principal (monetary item) and interest (constant real value non-monetary item) in international secured loans (monetary items) for development, subject to revaluation according to the variations of inflation. Afterwards it was extended to all types of bank loans (monetary items), private or special financing (monetary items), purchases (trade debtors/trade creditors being constant real value non-monetary items) or investments on installments, contracts (constant real value non-monetary items), and some special situations. Also it is used in legal standards such as the par value of stock/capitalization (constant real value non-monetary items) of companies, fines (payables being constant real value non-monetary items), etc.

It has become the preferred and predominant measure for determining the cost of Real Estate (variable items valued at Historical Cost being updated), values of housing (historical variable real value non-monetary items being updated) and any secured loan (monetary item), either private or of the Chilean government. Individual payments are made in Chilean pesos (the country's legal tender), according to the daily value of the UF.

For historical and current values of the Chilean Unidad de Fomento (UF), see government's Central Bank of Chile.

A similar currency unit for use generally in payment of taxes, fines, or customs duty is the Unidad Tributaria Mensual (UTM) (literally: monthly tax unit).

Evolution of the calculation of the UF

From its creation in 1967, each calendar quarter, the UF value of 100 Chilean escudo would be quoted based on the Consumer Price Index (CPI) of the past three months, which would be the official rate for the following quarter. In October 1975 with the currency changeover to pesos, the value of 1 UF was quoted in pesos and readjusted monthly. In July 1977 it was calculated daily by interpolation between the 10th of each month and the 9th of the following month, according to the monthly variation of the CPI. Since 1990 the Central Bank of Chile has determined its value. The values of the CPI are officially kept by the Instituto Nacional de Estadísticas de Chile (National Statistics Institute of Chile).

For historical and current values of the Chilean CPI (abbreviated as IPC in Spanish), see Banco Central de Chile Statistics Database

Historical values of the UF as of 31 December each year:

year Value
1967 Eº115,38
1968 Eº 148,17
1969 Eº 194,40
1970 Eº 256,67
1971 Eº 301,24
1972 Eº 533,92
1973 Eº 2.155,11
1974 Eº 15.887,00
1975 $ 94,70 ( Eº 94.700 )
1976 $ 275,78
1977 $ 462,58
1978 $ 613,37
1979 $ 842,14
1980 $ 1.103,61
1981 $ 1.232,25
1982 $ 1.464,67
1983 $ 1.824,03
1984 $ 2.230,05
1985 $ 2.818,39
1986 $ 3.298,77
1987 $ 4.044,03
1988 $ 4.484,39
1989 $ 5.432,32
1990 $ 7.043,38
1991 $ 8.286,27
1992 $ 9.423,57
1993 $ 10.623,13
1994 $ 11.533,17
1995 $ 12.482,81
1996 $ 13.280,48
1997 $ 14.096,93
1998 $ 14.685,39
1999 $ 15.066,96
2000 $ 15.769,92
2001 $ 16.262,66
2002 $ 16.744,12
2003 $ 16.920,00
2004 $ 17.317,05
2005 $ 17.974,81
2006 $ 18.336,38
2007 $ 19.622,66
2008 $ 21.452,57
2009 $ 20.942,88
2010 $ 21.455,55
2011 $ 22.294,03
2012 $ 22.840,75
2013 $ 23.309,56
2014 $ 24.627,10
2015 $ 25.629,09
Source: Valor UF

See also

External links

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