Brazilian real
The Brazilian 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 real replaced the cruzeiro real in 1994.
This article is about the modern Brazilian currency unit. For the currency of Brazil from the colonial period to 1942, see Brazilian real (old).Real brasileiro (Portuguese)
BRL (numeric: 986)
0.01
real
reais
$,R$
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R$ 2, R$ 5, R$ 10, R$ 20, R$ 50, R$ 100, R$ 200
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5, 10, 25, 50 centavos, and R$ 1
1 centavo
1 July 1994
3.94% (May 2023)
As of April 2019, the real was the twentieth most traded currency.[1]
Currencies in use before the current real include:
The current real was introduced in 1994 at 1 real = 2,750 cruzeiros reais.
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 2,750 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; that was equivalent to R$10 in 2020. Combined with all previous currency changes in the country's history, this reform made the new real equal to 2.75 × 1018 (2.75 quintillion) 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=R$1. Between 1996 and 1998 the exchange rate was tightly controlled by the Central Bank of Brazil, so that the real depreciated slowly and smoothly to the dollar, dropping from near US$1=R$1 to about US$1=R$1.2 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 US$1=R$2.[2]
In the following years, the currency's value against the dollar followed an erratic but mostly downward 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.
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 US$1=R$2. In May 2007, for the first time since 2001 (six years), 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. Lula started his government in 01/01/2003 with an exchange rate of US$1=R$3.52 and finished it in 12/31/2010 with an exchange rate of US$1=R$1.66.[3]
The exchange rate as of September 2015 was US$1=R$4.05. After a period of gradual recovery, it reached US$1=R$3 by February 2017.
Jair Bolsonaro's tenure, initially welcomed with enthusiasm by the financial markets, started with US$1=R$3.86. Fueled by meager results of the economy, quick disenchantment followed, resulting in a lack of foreign investments and a real's strong depreciation.[4] On 13 May 2020, during the COVID-19 pandemic, which deeply affected Brazil,[5] the real reached a historical low against the US dollar, being negotiated at US$1=R$5.90.[6]
Following Lula's reelection in the 2022 general elections, the market, which was expected to have reacted poorly, turned out favorable in the first week.[7][8] The US dollar exchange hit its lowest point since 29 August 2022, dropping from roughly US$1=R$5.30 immediately before the second round of the election, to about US$1=R$5.05 a week after Lula's win.
Coins[edit]
First series (1994–1997)[edit]
Along with the first series of currency, coins were introduced in denominations of 1, 5, 10 and 50 centavos and 1 real on 30 June 1994; the 25 centavos piece was soon followed on 30 September 1994 due to the constant lack of change in intermediate values in the centavos range, which caused the validity of the old Cruzeiro and Cruzeiro Real banknotes to be extended for two months beyond what was initially intended for the exchange of banknotes and coins until then in circulation for new ones in the pattern that began to circulate in the second half of 1994. All were struck in stainless steel.
The coins issued in 1994 are identical in size and weight to the older cruzeiro real coins, save for the 1-centavo piece which corresponded to the even older 1000-cruzeiro coin, as no CR$1 coin was made. This influenced the replacement of this family with a newer one in 1998.
The original 1-real coins, produced only in 1994, were demonetized on 23 December 2003[9] due to how often it was counterfeited.[10] All other coins remain legal tender.
Banknotes[edit]
First series (1994–2010)[edit]
In 1994, banknotes print "A" were issued by Casa da Moeda do Brasil in the amounts of 1, 5, 10, 50 and 100 reais, in addition to supplementary issues of banknotes ordered abroad in the values of 5, 10 and 50 reais of the print "B" produced abroad by the companies Giesecke+Devrient, Thomas de la Rue and François-Charles Oberthur Fiduciaire respectively. In 1997, modified banknotes of 1 real (print "B"), 5 and 10 reais (print "C") were launched, bearing the national flag as a watermark instead of the effigy of the republic in order to reduce the risk of such banknotes being used for counterfeiting banknotes at higher denominations. In 2000, the 10 reais commemorative banknote (print "D") was launched, and this banknote was the first polymer banknote to be issued in the country. In 2000 and 2001, the 2 and 20 reais banknotes were launched, respectively, using the sea turtle and the golden lion tamarin in the watermark and theme, and the 20 reais banknote was the first to make use of holographic elements on the Brazilian banknotes. In 2003, the print "C" of the 1 real banknote was put into circulation, which would have the name "República Federativa do Brasil" at the top in the place where the name "Banco Central do Brasil" was customarily placed, which was placed on the under the obverse of the bill, next to the word real. Such banknote ceased to be issued in 2005.