> Stores had to denominate their goods in terms of the new "reals" and each day an exchange rate between the paper currency and the "reals" would be published.

> Stores had to denominate their goods in terms of the new "reals" and each day an exchange rate between the paper currency and the "reals" would be published. Actually, that was the URV, not the Real. One of the problems we had (and still have, though much reduced) is inertial inflation: a lot of things were adjusted by the inflation, and many of these were also components of the inflation index itself, leading to a positive feedback loop. The trick was that, instead of being directly indexed to the inflation, prices and other things were fixed in URV, which itself was indexed to the inflation. This still kept the same indexing problem, but after a few months of this, the currency was converted to the Real, and the URV was fixed forever as exactly R$ 1. This removed a huge amount of indexation from the economy. But that was only part of the solution. There were also reductions in government costs and tax increases, so the government wouldn't have to print money; increase in imports, so the demand for goods wouldn't become greater than their offer; increase in interest rates to cool down the economy; and interventions in the exchange rate (IIRC, not forcing a fixed exchange rate, but the government buying/selling dollars in the market to move the exchange rate). Without these, after the change from Cruzeiro Real to Real, the inflation would grow quickly again.