Brrrrazil
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About this artwork
Obverse of a Brazilian 500 cruzados banknote. The banknote featuring Heitor Villa-Lobos, composer, cellist, pianist and guitarist.
Commemorates the 100th birthday of Heitor Villa-Lobos.
The cruzado was the currency of Brazil from 1986 to 1989. It replaced the second cruzeiro (at first called the "cruzeiro novo") in 1986, at a rate of 1 cruzado = 1000 cruzeiros (novos) and was replaced in 1989 by the cruzado novo at a rate of 1000 cruzados = 1 cruzado novo.
This currency was subdivided in 100 centavos.
Introduced on 28 February 1986, the objective of the Cruzado Plan was to achieve a rate of zero inflation. The plan functioned under the rationale that inflation was inertial and caused by structural issues such as wage indexation and systemic marked-up pricing. Wages were effectively frozen for a year as the government re-introduced a system of indexation. Wages were later adjusted by the granting of bonuses.[31] The plan dismantled many formal indexing mechanisms of financial assets in the Brazilian economy and was supported by monetary reform.[32] Economist Pereira suggests that the old currency (the cruzeiro) was replaced by a new currency (the cruzado) to inspire confidence in the domestic economy and reduce inflationary pressures resulting from a weak currency.[33]
The Cruzado Plan was successful until late 1986.[34] The plan resulted in a deep economic crisis as increased wages yet frozen prices stimulated a wage-price spiral of demand-induced inflation. The government budgetary deficit worsened as state-run enterprises had not corrected their prices to reflect future demand prior to the freeze.[35] Real return to government debt was distorted and caused Brazil to experience capital flight for the first time in their stabilisation policies.[36] Internal debt interest rates increased due to a fear of repudiation and contributed to the spiral into hyperinflation.
SOURCE: WIKIPEDIA https://en.wikipedia.org/wiki/Hyperinflation_in_Brazil#:~:text=Cruzado%20Plan%20(1986)%5Bedit,spiral%20into%20hyperinflation.%5B37%5D
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Brrrrazil
About this artwork
Obverse of a Brazilian 500 cruzados banknote. The banknote featuring Heitor Villa-Lobos, composer, cellist, pianist and guitarist.
Commemorates the 100th birthday of Heitor Villa-Lobos.
The cruzado was the currency of Brazil from 1986 to 1989. It replaced the second cruzeiro (at first called the "cruzeiro novo") in 1986, at a rate of 1 cruzado = 1000 cruzeiros (novos) and was replaced in 1989 by the cruzado novo at a rate of 1000 cruzados = 1 cruzado novo.
This currency was subdivided in 100 centavos.
Introduced on 28 February 1986, the objective of the Cruzado Plan was to achieve a rate of zero inflation. The plan functioned under the rationale that inflation was inertial and caused by structural issues such as wage indexation and systemic marked-up pricing. Wages were effectively frozen for a year as the government re-introduced a system of indexation. Wages were later adjusted by the granting of bonuses.[31] The plan dismantled many formal indexing mechanisms of financial assets in the Brazilian economy and was supported by monetary reform.[32] Economist Pereira suggests that the old currency (the cruzeiro) was replaced by a new currency (the cruzado) to inspire confidence in the domestic economy and reduce inflationary pressures resulting from a weak currency.[33]
The Cruzado Plan was successful until late 1986.[34] The plan resulted in a deep economic crisis as increased wages yet frozen prices stimulated a wage-price spiral of demand-induced inflation. The government budgetary deficit worsened as state-run enterprises had not corrected their prices to reflect future demand prior to the freeze.[35] Real return to government debt was distorted and caused Brazil to experience capital flight for the first time in their stabilisation policies.[36] Internal debt interest rates increased due to a fear of repudiation and contributed to the spiral into hyperinflation.
SOURCE: WIKIPEDIA https://en.wikipedia.org/wiki/Hyperinflation_in_Brazil#:~:text=Cruzado%20Plan%20(1986)%5Bedit,spiral%20into%20hyperinflation.%5B37%5D
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