Uruguayan peso ( es, peso uruguayo) has been a name of the

Uruguayan Uruguay (; ), officially the Oriental Republic of Uruguay ( es, República Oriental del Uruguay), is a country in South America. It shares borders with Argentina to its west and southwest and Brazil to its north and northeast; while bordering ...

currency since Uruguay's settlement by

Europeans Europeans are the focus of European ethnology, the field of anthropology related to the various ethnic groups that reside in the states of Europe. Groups may be defined by common genetic ancestry, common language, or both. Pan and Pfeil (2004) ...

. The present currency, the ''peso uruguayo'' (

ISO 4217 ISO 4217 is a standard published by the International Organization for Standardization (ISO) that defines alpha codes and numeric codes for the representation of currencies and provides information about the relationships between individual cu ...

code: ) was adopted in 1993 and is subdivided into 100 '' centésimos'', although centésimos are not currently in use.

Introduction

Uruguay obtained monetary stability in 1896, based on the

gold standard A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the la ...

. This favorable state of affairs ended after

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...

. An unsettled period followed. Economic difficulties after

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...

produced inflation, which became serious after 1964 and continued into the 1970s. The peso moneda nacional was replaced on 1 July 1975 by the nuevo peso (new peso; ISO 4217 code ) at a rate of 1 new peso for 1000 old pesos. The nuevo peso was also subdivided into 100 ''centésimos''. After further inflation, the peso uruguayo (ISO 4217 code ) replaced the on March 1, 1993, again at a rate of 1 new for 1000 old.

Inflation

Uruguayans became accustomed to the constant devaluation of their

currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general def ...

Uruguayans Uruguayans ( es, uruguayos) are people identified with the country of Uruguay, through citizenship or descent. Uruguay is home to people of different ethnic origins. As a result, many Uruguayans do not equate their nationality with ethnicity, b ...

refer to periods of real appreciation of the currency as ''atraso cambiario'', which literally means that "the exchange rate is running late" towards future devaluement. As a consequence of the instability of the local currency, prices for most big-ticket items (real estate, cars and even executives' salaries) are denominated in

U.S. dollar The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...

s. During the military rule, the peso was on a

crawling peg In macroeconomics, crawling peg is an exchange rate regime that allows depreciation or appreciation to happen gradually. It is usually seen as a part of a fixed exchange rate regime. The system is a method to fully use the key attributes of the ...

to the dollar. A table of the future value of the dollar was published daily by the government (called the ''tablita''). In 1982, the currency was abruptly devalued ("the ''tablita'' was broken"), throwing thousands of companies and individuals into bankruptcy. In the 1990s, a new mechanism to provide predictability was introduced, this time in the form of a sliding range, with top and bottom margins, at which the

government A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a ...

would intervene. In 2002, after a

banking crisis A bank run or run on the bank occurs when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future. In other words, it is when, in a fractional-reserve banking system (where banks no ...

and amid a huge budget deficit, the currency was again allowed to float, losing almost 50% of its value in a couple of weeks, and, again, throwing into bankruptcy thousands of companies and individuals who held debts denominated in US dollars. In 2004 a phenomenon completely new to most Uruguayans developed: the currency appreciated in nominal terms against the US dollar, going from 30 to 24 pesos to the dollar. By 2008 the peso reached 19 to the US dollar, recovering more than half of its loss during the crisis. This revaluation brought protests from the industrial sector, which felt that it lost competitiveness, but by July 2020, the peso had inflated to over 40 to the dollar. The government hopes that a floating currency will "de-dollarize" the economy. Uruguay does not seem to have found a mechanism that provides the exchange rate some level of predictability, while at the same time allowing the country to adapt its prices so that its exports remain competitive.

Coins

In 1994, stainless-steel 10, 20 and 50 centésimos and brass 1 and 2 pesos uruguayos were introduced. 5 and 10 pesos uruguayos were introduced in 2003 and 2004, respectively. The coins replaced same value notes.

Coin A coin is a small, flat (usually depending on the country or value), round piece of metal or plastic used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in large quantities at a mint in order t ...

s in circulation are: In July 2010, 50 centésimos coins were withdrawn from circulation. New 1, 2, 5, and 10 pesos coins were introduced in January 2011.

Banknotes

In 1995–1996, banknotes in denominations of, 5, 10, 20, 50, 100, 200, 500 (all modified versions of 5,000, 10,000, 20,000, 50,000, 100,000, 200,000 and 500,000 nuevo peso banknotes respectively) and 1000 pesos uruguayos were introduced, followed by new models of 5 and 10 pesos uruguayos notes in 1999. In 2003, 5 and 10 pesos uruguayos notes have been replaced by coins and 2000 pesos uruguayos were introduced. A new series of banknotes were introduced in 2014–2015, the same as the previous issue without the vertical word "URUGUAY" on the left side.

Banknote A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable instrument, negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand. Banknotes w ...

s in circulation are:

Central Bank Digital Currency (CBDC)

Although in many parts of the world, the amount of cash in circulation has risen over the last decade, there are some countries that buck the trend. In this small club of jurisdictions, a few have considered general purpose CBDCs that would be a complement to cash. Sweden and Uruguay are notable not just for the advanced stage of their work but the amount of information their central banks have made publicly available about their respective projects.

Unidad Previsional (UP)

Uruguay maintains a currency account unit named (UP), ISO 4217 code .

Unidad Indexada (UI)

(UP), ISO 4217 code , is a consumer price indicator for Uruguay.

References

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External links

Monedas del Uruguay (Coins of Uruguay)
{{Uruguay topics Economy of Uruguay Currencies introduced in 1993 Currencies of South America