Throughout a large part of the 20th century, Brazil's currency frequently changed due to inflation and other economic instability. Since 1942, Brazil has switched currencies eight times, often readopting old currencies or slight variations on old currencies for short periods. Since 1994, Brazil's currency has remained the real. While the real is currently stable, it suffered some setbacks in the late 1990s, after which the government devalued the currency and stopped matching it at a one-to-one rate with U.S. dollar.
From the time the Dutch unsuccessfully attempted to occupy Brazil in the 17th century, through Portuguese rule and the early years of independence, Brazil used a real prototype as its currency. In 1942, the official Brazilian currency switched to the cruzeiro due to gross inflation. Then in 1967, the currency switched for a brief three years to the slightly different cruzeiro novo. In 1970, the currency reverted back to the traditional cruzeiro. After inflation rates soared again through the 1980s, the government chopped three zeroes from the end of the cruzeiro and established a new currency. In 1986, Brazil debuted the cruzado.
Adoption of the Real
With inflation still a major problem, the Brazilian government removed three more zeroes from the cruzado in 1989. The resulting currency was renamed the cruzado novo. The Cruzado novo barely made it a year. In 1990, the government reverted right back to the cruzeiro. Inflation continued, and In 1993, a transitional currency known as the cruzeiro real (also known by the plural cruzeiro reais) was established. Finally in 1994, the cruzerio real gave way to the current Brazilian real.
As of 2009, the current real denominations consisted of both bills and coins. Bill denominations come in 2, 5, 10, 20, 50 and 100 notes. Coin denominations come in 5, 10, 25, 50 centavos (percents of a single real) and 1 real coin. Each bill has a different main color in a variety of shades. The front of each bill features the bust of the republic's effigy. Animals grace the back of each bill. For instance, the 20 reais bill has a golden lion tamarin on the reverse and the 100 reais bill has a dusky grouper on the back. Centavos coins display the Southern Cross on the front and various political leaders and symbols on the back.
Until 1999, the real's value was pegged to the dollar at a one-to-one rate. Since 1999, the exchange rate with the U.S. dollar has wavered. As of August 2009, the exchange rate of reais to dollars was 1 real to .53 U.S. dollars.
If you visit Brazil and want to exchange foreign currency, you will need to visit an official currency exchange center known as a "Casas de Cambio." Although some banks will also exchange currencies, they often veer far from the actual exchange rate according to V Brazil. If you have an ATM card or a credit card, you can withdraw reals from clusters of ATMs in most Brazilian banks. However, note that many ATMs shut down from 10PM to 7AM and others have restrictions on the type of ATM or credit cards they accept.
Although inflation continues in Brazil, the currency situation has stabilized considerably. In 2009, the inflation rate dropped to a moderate 4.37 percent. Gone are the days of the 10 million reis or 10,000 cruzeiros notes. While additional currency changes and inflation spikes may occur in the future, the current political and economic situation in Brazil ensures that the real will remain for some time to come.