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The Daily Unidade Real de Valor, or URV (Portuguese, Real Value Unit), was a non-monetary reference currency (i.e., non-fiat) created in March 1994, as part of the Plano Real in Brazil. It was the most theoretically sophisticated piece of the Plano Real and was based on a previous academic work by Pérsio Arida and André Lara Resende, the "Larida Plan", published in 1984.
Its main purpose was to establish a parallel currency to the cruzeiro real, free from the effects of inertial inflation on the latter, which exceeded 1,200% per year prior to the implementation of the new currency, the real.
It was conceived as a temporary instrument to break up the "psychological inertia" that had ingrained in the Brazilian mindset and which caused prices to keep rising as a consequence of subjective estimation of inflation or preemptive adjustment without cost assessment. These phenomena are among the chief characteristics of hyperinflation, resulting from the erosion of confidence on the legal tender. The idea was to let the old currency (the cruzeiro real) fully absorb the effects of hyperinflation while having a new currency to be stable (in nominal terms) by adjusting its exchange rate against the old one.
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. The exchange rate of URVs to cruzeiros reais was recalculated and published daily by the government.
Prices were quoted both in URVs and cruzeiros reais, but payments had to be made exclusively in cruzeiros reais, since the URV would not become legal tender until July 1, 1994. For instance, banks were required to report balances on accounts in both currencies and contracts had to be rewritten to express prices in URVs.
The URV was extinguished on July 1, 1994, when it was converted to a new currency, the real, at parity (i.e., 1 real = 1 URV = CR$2,750), effectively breaking the hyperinflationary cycle, bringing stability to the Brazilian currency.
The implementation of the new currency was one of the greatest currency changes in known history, with almost the entirety of the country's legal tender replaced in about 45 days.
| Daily value of the URV per week (cruzeiros reais) | ||||||||||||
| 1st week | Mon | Tue | Wed | Thu | Fri | 2nd week | Mon | Tue | Wed | Thu | Fri | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Date Value |
28 Feb – |
1 Mar 647.50 |
2 Mar 657.50 |
3 Mar 667.65 |
4 Mar 677.98 |
Date Value |
7 Mar 688.47 |
8 Mar 699.13 |
9 Mar 709.96 |
10 Mar 720.97 |
11 Mar 732.18 | |
| 3rd week | Mon | Tue | Wed | Thu | Fri | 4th week | Mon | Tue | Wed | Thu | Fri | |
| Date Value |
14 Mar 743.76 |
15 Mar 755.52 |
16 Mar 767.47 |
17 Mar 779.61 |
18 Mar 792.15 |
Date Value |
21 Mar 805.53 |
22 Mar 819.80 |
23 Mar 834.32 |
24 Mar 849.10 |
25 Mar 864.14 | |
| 5th week | Mon | Tue | Wed | Thu | Fri | 6th week | Mon | Tue | Wed | Thu | Fri | |
| Date Value |
28 Mar 879.45 |
29 Mar 895.03 |
30 Mar 913.50 |
31 Mar 931.05 |
1 Apr 931.05 |
Date Value |
4 Apr 931.05 |
5 Apr 948.93 |
6 Apr 967.16 |
7 Apr 985.74 |
8 Apr 1,004.68 | |
| 7th week | Mon | Tue | Wed | Thu | Fri | 8th week | Mon | Tue | Wed | Thu | Fri | |
| Date Value |
11 Apr 1,023.98 |
12 Apr 1,043.65 |
13 Apr 1,063.70 |
14 Apr 1,084.13 |
15 Apr 1,104.96 |
Date Value |
18 Apr 1,126.18 |
19 Apr 1,147.81 |
20 Apr 1,169.80 |
21 Apr 1,191.93 |
22 Apr 1,191.93 | |
| 9th week | Mon | Tue | Wed | Thu | Fri | 10th week | Mon | Tue | Wed | Thu | Fri | |
| Date Value |
25 Apr 1,313.97 |
26 Apr 1,235.99 |
27 Apr 1,258.12 |
28 Apr 1,280.19 |
29 Apr 1,302.65 |
Date Value |
2 May 1,323.92 |
3 May 1,345.54 |
4 May 1,367.56 |
5 May 1,389.94 |
6 May 1,412.74 | |
| 11th week | Mon | Tue | Wed | Thu | Fri | 12th week | Mon | Tue | Wed | Thu | Fri | |
| Date Value |
9 May 1,435.92 |
10 May 1,459.76 |
11 May 1,484.27 |
12 May 1,509.20 |
13 May 1,534.66 |
Date Value |
16 May 1,560.55 |
17 May 1,586.87 |
18 May 1,613.64 |
19 May 1,640.86 |
20 May 1,668.54 | |
| 13th week | Mon | Tue | Wed | Thu | Fri | 14th week | Mon | Tue | Wed | Thu | Fri | |
| Date Value |
23 May 1,696.69 |
24 May 1,725.31 |
25 May 1,754.41 |
26 May 1,784.00 |
27 May 1,814.09 |
Date Value |
30 May 1,844.69 |
31 May 1,875.82 |
1 Jun 1,908.68 |
2 Jun 1,942.11 |
3 Jun 1,942.11 | |
| 15th week | Mon | Tue | Wed | Thu | Fri | 16th week | Mon | Tue | Wed | Thu | Fri | |
| Date Value |
6 Jun 1,976.13 |
7 Jun 2,010.74 |
8 Jun 2,046.38 |
9 Jun 2,082.65 |
10 Jun 2,119.80 |
Date Value |
13 Jun 2,157.78 |
14 Jun 2,196.55 |
15 Jun 2,236.02 |
16 Jun 2,276.91 |
17 Jun 2,318.55 | |
| 17th week | Mon | Tue | Wed | Thu | Fri | 18th week | Mon | Tue | Wed | Thu | Fri | |
| Date Value |
20 Jun 2,361.49 |
21 Jun 2,406.05 |
22 Jun 2,452.17 |
23 Jun 2,499.18 |
24 Jun 2,547.09 |
Date Value |
27 Jun 2,596.58 |
28 Jun 2,647.03 |
29 Jun 2,698.46 |
30 Jun 2,750.00 |
1 Jul R$1.00 | |
| Monday values were retroactive to Saturdays and Sundays. Subsequently, a formula was established for retroactive accounting for the previous months and years. Source: Banco Central | ||||||||||||
See also
- Constant Purchasing Power Accounting
- Inflation accounting
- International Financial Reporting Standards
- Indexed unit of account
References
- Banco Central do Brasil. Disponível em BCB
External links
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