Happy 30th birthday, real! Uh, wait… do you take PIX?
The national currency, the Brazilian real, turned 30 years old this week. It has certainly come a long way since its 1994 launch...
The post Happy 30th birthday, real! Uh, wait… do you take PIX? appeared first on The Brazilian Report.
The national currency, the Brazilian real, turned 30 years old this week.
As we sing Happy Birthday and celebrate the plan that ended hyperinflation and brought economic stability to Brazil in the 1990s, it’s also worth looking at how far the currency has come in its lifetime.
Developed in 1993 by Fernando Henrique Cardoso, the former finance minister (and later two-term president), the Real Plan (or “Plano Real”) took off in July 1994.
The month before its launch, 12-month inflation was almost at 5,000 percent — in the year following its launch, the official inflation index was 33 percent.
Now, Brazil’s problem isn’t specifically inflation. It’s the exchange rate. The real hit BRL 5.70 against the U.S. dollar on Tuesday, its highest in 30 months. President Luiz Inácio Lula da Silva’s constant bickering with Central Bank head Roberto Campos Neto has not been helping Brazil get out of this slump.
The real has indeed changed significantly over the years on the world stage. But it has also definitely evolved in the Brazilian market, thanks largely to the PIX instant payments system. PIX accounted for nearly 42 billion transactions and 39 percent of all electronic payments in 2023, and it is sure to challenge the card industry in the years to come.
Indeed, it is amazing to think about how far the currency has come over its first 30 years. Back in 1994, you’d have been hard-pressed to find many who could say for sure that the Brazilian real would last three decades, going strong — and even fewer who could predict the rise and ubiquity of instant payments in such a short space of time.
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