Paraguay may be one of only two landlocked countries in South America (along with Bolivia) but the country, and the Paraguayan guarani, both have a history that spans the Atlantic Ocean.
Want to learn more about Paraguay?
- Paraguay Currency: Paraguayan guarani (plural: guaraníes)
- Paraguay Currency Code: PYG
- PYG Symbols: ₲
- PYG Subunits: centisimo (no longer in circulation due to inflation)
- PYG Notes: 2,000, 5,000, 10,000, 20,0000, 50,000 & 100,000
- PYG Coins: 50, 100, 500, & 1,000 guaranies
- Paraguay Central Bank: Banco Central del Paraguay
- Paraguay GDP: $26.804 billion (99th)
History of the Paraguayan guarani
Like all of Spain’s former colonial holdings, Paraguay used the Spanish colonial real. Despite winning independence in 1811, Paraguay continued to use the Spanish real (and other coins found in the region) due to the young country’s inadequate minting capabilities.
This changed when the peso was introduced in 1856 at a rate of 8 reals to 1 peso. The peso was subdivided into 8 reals until 1870 when it was decimalised, meaning 1 peso was worth 100 centesimos. In 1874 centesimos were renamed centavos.
In 1944 the peso was then replaced by the guarani at a rate of 100 to 1 in order to bring greater monetary stability to the country. The guarani name is derived from that of the Guarani people, a group of indigenous peoples from South America that still inhabit Paraguay.
Under the dictatorship of Alfredo Stroessner (the longest lived dictatorship in South American history), the guarani was pegged to the US dollar from 1960 to 1985 at a rate of 126 PYG to 1 USD. The peg provided monetary stability and there was great economic growth in Paraguay under Stroessner’s rule, but also many human rights abuses.
By the 1990’s PYG was allowed to float freely, causing its value to plummet to 2,056.8 in 1996, 2,177.9 in 1997, and 2,726.5 in 1998. It was then put on a wide band, allowing the currency to move in response to market forces, but only within a predetermined range. Despite this, in 2000 the currency value had fallen to 3,486.4. A plan was proposed in 2011 to replace the PYG with the Nuevo guarani (PYN) at a rate of 100 PYG to 1 PYN. Due to confusion and logistical factors the plan has been postponed indefinitely.
At the time of writing (September 09, 2016) the value of the Paraguayan guarani had fallen to 5,559.88 PGY to 1 USD, making it the lowest value currency in the Americas. 1 CAD buys you 4,200.42 PYG.
|50 ₲||Marshal Jose Felix Estigarribia (war hero and former President of Paraguay)||Acaray Dam|
|100 ₲||General Jose Eduvigis Diaz||Ruins of Humaita (a strategically located city which served as the Paraguayan Army’s most important stronghold during the Paraguayan War)|
|500 ₲||General Bernardino Caballero (President and war hero)||Central Bank of Paraguay|
|1,000 ₲||Marshal Francisco Solano Lopez (President of Paraguay and instigator of the Paraguayan War, killed in action)||National Pantheon of the Heroes|
|2,000 ₲||Adela and Celsa Speratti (famous teachers who shaped education in Paraguay)||School Parade||Magenta|
|5,000 ₲||Carlos Antonio López (leader of Paraguay)||Palacio de Lopez (the seat of government and presidential workplace)||Orange|
|10,000 ₲||Jose Gaspar Rodriguez de Francia (first dictator of Paraguay following independence)||May 15, 1811 (Independence from Spain)||Brown|
|20,000 ₲||Paraguayan women||Central Bank of Paraguay||Light Blue|
|50,000 ₲||Agustin Pio Barrios (a classical guitarist and composer)||Gustin Pio Barrios Guitar||Beige|
|100,000 ₲||Saint Roque Gonzalez de Santa Cruz (the first missionary who lived with the Guarani people)||Itaipu Dam||Green|
Paraguay has a market economy heavily dependent on agricultural exports, particularly soybeans. Unemployment is low at just 5.5% but 34.7% of Paraguayans live below the poverty line.
After centuries of isolationism the country entered a period of sustained economic growth under the dictatorship of Alfredo Stroessner Mattiauda. Throughout the 60’s growth averaged just under 5%, and from 1976 to 1981 Paraguay grew at a rate or more than 10%. The 70’s and 80’s were a time of rapid growth as well as economic and social change. Since 1990 the country has remained heavily dependent on agriculture exports, and inequality has increased. GDP growth in 2014 was a healthy 4.4%. Agriculture makes up about 20% of GDP, industry just 17% and services about 63%.
If Paraguay can achieve a greater level of political stability and a more equitable society, then it will be able to better capitalize on its vast hydroelectric resources and young population.
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