Brazilian Real

The history of the Real

Although the first notable financial exchanges occurred via bartering, it wasn't until the arrival of the Portuguese that the need for currency in Brazil became evident. In the 16th century, the colonisers brought gold, silver and copper coins with them for trading purposes. During the same period, pirates often traded on the Brazilian coast which also encouraged the circulation of various coins. In the course of the next two centuries, Spanish Reales (brought to Brazil from Peru) were the most abundantly circulated coins. Due to the variety of coins present in the country, each one's value was measured by its metal content.

The colony, however, lacked a specific monetary system. Consequently, the Brazilian government would regularly establish specific commodities as legal tender. For example, in 1614 the governor of Rio de Jainero set sugar as the commodity of trade. In other parts of Brazil, products such as tobacco, coffee, cocoa, clove and cotton also became legal tender. African slaves brought to the Brazilian colony even used the zimbo (the shell of a mollusk found in the Brazilian coast) as a trading commodity.

Over the centuries, the Brazilian colony felt the need to produce its own coins and subsequently minted the Real in mints such as The City of Bahia Mint. The Real would later become the official currency in 1690. But it wasn't until the first half of the following century that all gold coins in circulation were brought to the various mints to be turned into the country's official coins. The Real was used in Brazil throughout the entire colonial period, and its popularity created a demand for more mints such as the mints of Rio de Janeiro, Pernambuco and Minas Gerais.

In 1772, the first paper bill was introduced when the Portugese Crown began extracting diamonds from Tejuco do Serro Frio as a means of raising funds. Slowly, bank notes began to gain peoples' confidence and grew steadily more popular.

The Real remained the country's legal tender until 1942, when it was replaced by the Cruzeiro. The Federal Government of Brazil became the only official authority allowed to mint money, and the Cruzeiro replaced the Real at a rate of 1000 réis = 1 Cruzeiro. It was the legal tender from 1942 to 1986, and then again from 1990 to 1993.

On July 1, 1994, during the presidency of Itamar Franco, the Plano Real was implemented in an effort to stabilize the Brazilian economy and substitute the short lived Cruzeiro.