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Isn't that kind of what Brazil did in 1994 with URV? From Wikipedia: "URVs were quoted in cruzeiros reais and its intrinsic value was pegged to three price ind
by edwcross 5y ago
Isn't that kind of what Brazil did in 1994 with URV?
From Wikipedia: "URVs were quoted in cruzeiros reais and its intrinsic value was pegged to three price indices and had a fixed parity of 1-to-1 to the daily U.S. dollar exchange rate."
- novaleaf 5y agoYou would like to listen to / read this planet money episode: https://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil https://www.npr.org/sections/money/2010/10/04/130329523/how-...
- jecel 5y agoIt was the 1991 Cavallo Plan in Argentina that tied the local currency to the U.S. dollar: https://en.wikipedia.org/wiki/Convertibility_plan https://en.wikipedia.org/wiki/Convertibility_plan The Real Plan in Brazil created a three month period with a combination of the old currency (Cruzeiros Novos) and a new virtual one (URV - Unidade Real de Valor) with an official daily exchange rate between them. This rate was selected to keep the URV at almost exactly 1 U.S. dollar but when both were replaced by a new actual currency (the Real), that was officially allowed to float relative to the dollar. The real did initially get slightly valued relative to the dollar (an exchange rate of 1 R$ = 0.85 US$, for example) but floated slightly up and down until the end of 1998 when it suddenly jumped to 2 R$ = 1 US$ in order to block a huge wave of speculative money that was destroying economies around the world (having previously hit Russia, then the Asian Tigers).