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Brazilian real
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The real (meaning both "royal" and "real", in English, or in Brazilian Portuguese; sign: R$; code: BRL) is the present-day currency of Brazil and was also the currency during the period 1690 to 1942. When the first real circulated, the plural used was réis. The currently used plural form is reais, with the symbol R$ and ISO 4217 code BRL. The modern real is subdivided into 100 centavos.
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Encyclopedia
The real (meaning both "royal" and "real", in English, or in Brazilian Portuguese; sign: R$; code: BRL) is the present-day currency of Brazil and was also the currency during the period 1690 to 1942. When the first real circulated, the plural used was réis. The currently used plural form is reais, with the symbol R$ and ISO 4217 code BRL. The modern real is subdivided into 100 centavos. The exchange rate as of March 6, 2009 is approximately BRL 2.389 to USD 1.00.
First real, 1690-1942
The Portuguese real was the currency used by the first Portuguese settlers to arrive in the Americas, but the first official money to circulate bearing the name "real" was actually printed in 1654 by the Dutch, during their occupation of part of the Brazilian Northeast.
The real became Brazil's official currency in 1790. It was not sub-divided in smaller units. The real was affected by inflation during its long lifespan and the base currency unit shifted from the real to the mil réis (one thousand réis) and the conto de réis (one million réis) in the final years of the República Velha era.
One conto de réis was represented by the symbol Rs written before the value and by a dollar sign separating the units group (lower than one mil réis, i.e. between 000 and 999). Thus, 350 réis was written as "Rs 350"; 1,712 réis as "Rs 1$712"; and 1,020,800 réis was written as "Rs 1:020$800". This means that the colon functioned as the millions comma and the $ sign as the thousands comma; the colon is the actual group separator, and the $ sign is used only for separating the smaller group of units and only if it is not present in the initial currency symbol (the use of this $ sign was kept consistent within the symbols commonly used to abbreviate the currency unit when Brazil changed its currency, by keeping the past initial symbol and just appending the $ sign to it, meaning its value was one thousand times the previous currency).
In the 18th century and early 19th centuries, the gold currency was based on the 22 carat gold piece which weighed ½ ounce (14.34 grams). The standard for the silver currency varied during this period, with the 640 real coin fixed at onça (17.92 grams) of .917 silver in 1806. In 1834, the peça was revalued at 10,000 réis and the silver 1200 real coin was set at 415 grains (26.89 grams) of .917 silver. In 1846, a gold standard was established with the mil réis set at 822.076 mg gold, a 37.5% debasement from the previous standard.
After the establishment of the Republic in 1889, the value of the currency fell, with a peg of 180 mg of gold for the mil réis set in 1926. This was abandoned in 1933 when the mil réis was pegged to the U.S. dollar at a rate of 12 mil réis = 1 dollar. In 1942, the real was replaced by the cruzeiro, at a rate of 1 mil réis = 1 cruzeiro.
Coins
In the 1750s, copper coins were in circulation in denominations of 5, 10, 20 and 40 réis, silver coins for 75, 150, 300 and 600 réis, and gold coins for 1000, 2000, 4000 and 6400 réis. The silver coinage was reformed in 1778, with the introduction of 80, 160, 320 and 640 real coins. Between 1780 and 1782, gold 800, 1600 and 3200 réis were added. In 1809, older copper and silver coins were counterstamped with the Portuguese arms, doubling the value of 5, 10, 20 and 40 real pieces and increasing the value of 75, 150, 300 and 600 real coins to 80, 160, 320 and 640 réis. From 1810, Spanish 8 real coins ("Spanish dollars") were overstruck to produce 960 real coins. Copper 80 réis were introduced in 1811.
Between 1823 and 1833, the copper coinage of Brazil varied across the country, with denominations of 10, 20, 37½, 40, 75 and 80 réis being produced. Silver coins continued in denominations of 80, 160, 320, 640 and 960 réis, along with gold 4000 and 6400 réis.
Between 1833 and 1835, the coinage was reformed. The copper coinage was standardized across the country, with the introduction of countermarked coins for 10, 20 and 40 réis. Silver coins were introduced in denominations of 100, 200, 400, 800 and 1200 réis, along with gold 10,000 réis.
A further reform between 1848 and 1854 reduced the silver and gold content of the coinage, with new silver coins for 200, 500, 1000 and 2000 réis, and gold 5000, 10,000 and 20,000 réis. Bronze 10 and 20 réis were introduced in 1868, followed by cupro-nickel 100 and 200 réis in 1871, bronze 40 réis in 1873 and cupro-nickel 50 réis in 1886. The 10 réis was discontinued in 1870.
In 1901, cupro-nickel 400 réis were introduced, followed by cupro-nickel 20 réis in 1918. Aluminium-bronze 500 and 1000 réis were introduced in 1922, followed by cupro-nickel 200 réis, aluminium-bronze 2000 réis and silver 5000 réis in 1936.
Banknotes
The earliest Brazilian paper money was issued between 1770 and 1793 by the Administracão Geral dos Diamantes (Royal Diamond Administration) to pay diamond prospectors. Various denominations were issued with the value written on at the time of issue. They circulated at face value and were convertible into coins. Notes were issued by various provinces between 1808 and 1857, in denominations of 37½, 75, 150, 300, 450, 500, 600, 10,000, 25,000, 50,000 and 100,000 réis.
The first (private) Banco do Brazil was founded in 1808 and began issuing notes in 1810, in denominations of 30, 40, 50, 60, 70, 80, 90, 100, 20, 300 and 400 mil réis, with 4, 6, 8, 10, 12 and 20 mil réis added in 1813 and 1 and 2 mil réis in 1828. This bank closed in 1829.
In 1833, the government issued copper exchange notes in denominations of 1, 2, 5, 10, 20, 50 and 100 mil réis. These were followed, in 1835, by Treasury notes in denominations of 1, 2, 5, 10, 20, 50, 100, 200 and 500 mil réis. 500 mil réis notes were added in 1874, with 1000 mil réis introduced in 1921. Treasury notes continued to be produced throughout the remaining period the real circulated and the final issues were overstamped to produce the first cruzeiro notes.
Between 1850 and 1893, a number of private banks issued paper money in denominations between 10 and 500 mil réis. They included a later Banco do Brazil (1853-1890), the Banco do Maranhão (1857-1885) and the Banco da República dos Estados Unidos do Brasil (1890-1892).
Regional governments issued paper money between 1892 and 1897. Denominations included 100, 200 and 500 réis and 1, 2, 5, 10, 50, 100, 200 and 500 mil réis, with issues from Alagoas, Amazonas, Maranhão, Pernambuco, Rio Grande do Norte and Sergipe.
Between 1906 and 1910, the Caixa de Conversão issued notes in denominations of 10, 20, 50, 100, 200, 500 and 1000 mil réis (1 conto de réis). In 1905, another Banco do Brazil was founded, which issued paper money between 1923 and 1942 in denominations of 1, 2, 5, 10, 20, 50, 100, 200, 500 and 1000 mil réis. From 1923, the name of the bank was altered to Banco do Brasil. In 1926, the Caixa de Estabilização issued gold notes in denominations of 10, 20, 50, 100, 200, 500 and 1000 mil réis.
Regional governments again issued paper money between 1924 and 1942. Denominations included 2, 5, 10, 20, 50, 100, 200 and 500 mil réis, with issues from Minas Gerais, Rio Grande do Sul and São Paulo. The last "réis" banknotes were replaced by cruzeiro banknotes and withdrawn in 1955.
Contemporary real, 1994-
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. It replaced the short-lived cruzeiro real.
The real was introduced at a rate of R$1.00 = 1 unidade real de valor (URV, "real value unit") a non-circulating currency. At introduction, the CR$ to URV exchange rate was set at 1 URV = CR$2750 (the average exchange rate of the U.S. dollar to the cruzeiro real on that day) and a massive banknote changeover process was undertaken, due to the demonetization of the cruzeiro real. As a result of multiple currency reforms, the present real is equivalent to 2.75 x 1018 pre-1942 réis.
The real is subdivided into 100 centavos. The symbol R$ is used before the number and the decimal separator is a comma (): R$ 123,45.
The real initially appreciated (gained value) against the U.S. dollar as a result of the large amount of capital inflows in late 1994 and 1995. It then began a gradual depreciation process, culminating in the 1999 January Brazilian currency crisis, when the Real suffered a maxi-devaluation, and fluctuated wildly. Following this period (1994-1999) of a quasi-fixed exchange rate, an inflation-targeting policy was instituted by new central bank president Arminio Fraga, which effectively meant that the fixed-exchange period was over.
The currency suffered a gradual depreciation until late 2002, when the prospect of the election of PT's (Labour Party) 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, as many Brazilians fearing another default or a resumption of heterodox economic policies purchased tangible assets as an inflation hedge or just simply took their money out of the country. At its worst point in October 2002, the Real actually reached its historic low of almost R$4 per US$1. However, following assurances by then central bank president Arminio Fraga and repeated assertions by Lula and his finance minister that orthodox macroeconomic policies would be continued (including inflation-targeting, primary fiscal surplus and floating exchange rate, as well as continued payments of the public debt) the real has been getting stronger and stronger against the dollar and, since the beginning of 2005, most other world currencies as well.
In the year of 2007, in spite of the various attempts of the Brazilian Banco Central (Central Bank) to keep real low, it has grown stronger against the dollar. In May 2007, the real became worth more than 50 U.S. cents for the first time in recent years. As of March 06 2009, 1 real = 0.41853 U.S. dollars, and 1 U.S. dollar = 2.3893 reais.
Coins
In 1994, coins were introduced in denominations of 1, 5, 10, 25 and 50 cents and 1 real. All were struck in stainless steel. In 1998, a second series of coins was introduced, with copper-plated steel 1 and 5 centavos, brass-plated steel 10 and 25 centavos, a cupronickel 50 centavos and a bi-coloured brass and cupronickel 1 real (from 2002 onwards a steel 50 centavos and a bi-coloured brass and steel 1 real). Both series of coins are valid, but the government has plans to eventually remove the first from circulation. On December 23 2003, the first type 1 real coin started to be withdrawn from circulation. In November, 2005, the Brazilian Central Bank decided to discontinue the production of 1 centavo coins due to their small value. However, the existing coins continue to be valid. Most retailers tend to round their prices to the next 5 or 10 centavos.
Images on board are to scale
Images on board are to scale
To mark special occasions, the Brazilian Central Bank has released new versions of the one real coin. So far, this has been done three times. The difference between those coins and the standard 1 real coins is only on the reverse side, which depicts something alluding to the specific occasion. All the versions are legal tender, being as valid as the main issue.
Banknotes
In 1994, banknotes were introduced in denominations of 1, 5, 10, 50 and 100 reais. These were followed by 2 reais in 2001 and 20 reais in 2002. In January, 2006, the Brazilian Central Bank discontinued production of the 1 real banknote.
In April 2000, in comemoration 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 styled version of a map of Brazil with photographs depicting the ethnic variety of the Brazilian people (white, black, amerindian).
See also
External links
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