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The Uruguay Peso

 

The Uruguay Peso is the most common coin in this South American Nation. Do you realize how much there is to know about this monetary unit?

Peso is a term that many countries use when naming their coins. Although the name may be shared by Argentina and Brazil A Peso is Not Always the same.

Travelers should make a point of becoming well versed in money conversions before they travel abroad. As of March 2010, $10 US dollars is the equivalent of 38.57 Argentinean pesos or 195 Uruguay pesos.

"Weight" is the correct name for the legal tender that is produced and used by the Oriental Republic of Uruguay. By law the production of "weight" is overseen by the Central Bank of Uruguay. Peso and other Uruguayan money is the proper legal tender to use while you are in the country although some businesses will accept the money from other countries such as dollars from the US.

The Uruguayan peso is known to have been the currency used by this country and dates back to the time the first Europeans created settlements in this nation. The Peso that is currently in use debuted in 1993. The modern day coin can be divided into 100 centesimos which is much like an American dollar being composed of 100 pennies.

When the first financial money base was created for Uruguay in 1896 the foundation that the money was based on was the popular gold standard. This factor would soon be disrupted shortly after WWI.

Due to the instability of world monetary markets things began to change drastically for many countries. There were many economic and financial woes that would worsen with the onset of WWII when inflation began to climb and the combination of world events would serve to drive the purchasing power of money such as the Uruguay peso down even further. This unsettling chain of events would continue to rock the Uruguay economy right through the 1960s and the 1970s.

The Nuevo peso, or "new" Uruguay peso was issued as a replacement for the older peso in the fall of 1973. Although this was a new unit of money for the Uruguay government, the old structure of one peso being the equivalent of 100 Uruguay centesimos remained unchanged. The government mandated that for every 1000 old pesos that were turned in the bank would give the holder 1 of the new pesos.

Still it appeared that the inflation and economic conditions were not yet done wreaking havoc on the peso. As the purchasing power of the peso continued to drop the country decided to issue the Peso Uruguayo in 1993. This is also when the country was introduced to the idea of the "weight" denomination. Once again the newest Peso from Uruguay would be exchanged for older pesos at the rate of 1:1000. This meant that residents would receive 10 new Uruguay pesos for a total of 10,000 older ones.

For most Uruguay of the people of Uruguay the realization that their national currency was almost always being rocked by devaluation became an accepted fact of life. Thus began a change in the way prices were listed for luxury items and major purchases such as cars, high tech electronics and land. All of these items began to show price tags that reflected the cost in US dollars which appeared to have the stability and strength that could withstand the onslaught of inflation.

Beginning in the year 1994 there were stainless-steel coins issued that were the equivalent of 10, 20 and 50 centésimos.

Even the Uruguay peso would take on a new look as brass 1 and 2 pesos began to be introduced. Then during the years 2000 and 2003 there were new additions to the Uruguay peso family tree as 5 and 10 pesos uruguayos were brought onto the market.

Uruguay is a country with a Strong Dollarization (when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency) and this meant that there was an eager anticipation to know the values and predictability of the world exchange rate, especially in relation to the US dollar and the Uruguayan Weight.

Although there were still financial crises that would have to be faced things began to change in 2004 when the weight began to actually appreciate in value. Inflation and a depressed economy are once again creating havoc in the international market but this time the Uruguayan peso should be able to weather the storm.


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