What is the Currency of Brazil?

By Joseph Kiprop on August 1 2017 in Economics

Brazilian currency.

The Brazilian Real is the official currency used in Brazil and is abbreviated as R$ in international money markets. The Brazilian Real is made up of subunits known as centavos where 1 Brazilian Real is made up of 100 centavos. The Brazilian Real is printed locally by the Casa da Moeda do Brasil and is issued by the Central Bank of Brazil. The Brazilian Real was introduced into circulation in 1994 as one of the policies required to stabilize the economy which had experienced high inflation and replaced the cruzeiro real which was subsequently demonetized. During its adoption, the Brazilian Real was at par with the US Dollar. However, local and international currency crises caused the Brazilian Real to depreciate, reaching a historic low of R$4: US$1 in 2002. The government set up orthodox macroeconomic policies aimed to reduce the increased inflation experienced by the Brazilian Real.

The Brazilian Real (Old)

The old Brazilian Real was the first official currency to be used in Brazil and was introduced by the Portuguese during the country’s colonial period, replacing the Portuguese real. One Brazilian Real was comprised of 1000 subunits known as Reis. The old Brazilian Real was abbreviated as Rs$ in the money markets. The currency was still used after Brazil gained independence in 1822. The old Brazilian Real was replaced by the Brazilian cruzeiro in 1942.

The Brazilian Cruzeiro

The Brazilian cruzeiro was the official currency used in the country in the 20th century. The cruzeiro was named after the Southern Cross constellation whose Brazilian name is “Cruzeiro do Sul.” The currency was issued three times in the country’s history with the first issue being in 1942, replacing the colonial Brazilian Real. The cruzeiro was reissued in 1967 due to increased inflation and was in circulation until 1986. The Brazilian cruzeiro was issued a third time in 1990 and was abbreviated in the money markets as Cr$. The third cruzeiro was replaced in 1993 by the cruzeiro real.

The Brazilian Cruzeiro Real

The Brazilian cruzeiro real was introduced by the Central Bank of Brazil on August 1st, 1993 as a replacement of the Brazilian cruzeiro. The Brazilian cruzeiro real was made up of 100 units known as centavos which only existed for the purpose of accounting. However, the currency’s circulation in the economy was short-lived with the cruzeiro real being replaced by the current Brazilian Real on June 30th, 1994 with one Brazilian real being equivalent to 2750 cruzeiros reals.

Coins and Banknotes

During the introduction of the New Brazilian Real in 1994, the Central Bank of Brazil issued stainless steel coins in 50, 25, 10, 5, one centavo, and one real denomination. However, the one real and one centavo coins were soon withdrawn from circulation by the Central Bank. The current banknotes in the circulation of the Brazilian Real are issued in 100, 50, 20, 10, 5, and two real denominations. The Central Bank has also issued commemorative coins and banknotes in line with the celebration of historical events. New polymer banknotes were issued by the Central Bank of Brazil in 2004.

More in Economics