Wanderlust World Wanderlust World The Brazilian real has been the standard national currency used for both private and commercial commerce throughout the 26 states of Brazil virtually since the landing of Portuguese colonizers in the 16th century. Brazilian currency is controlled by the Banco Central do Brasil (central bank of Brazil) and comes in a variety of paper notes and coins. The real has historically paled in conversion to the USD, though in 1994 with the introduction of the real plan, the real was set against the USD one to one. In subsequent months, the real surpassed the dollar, though only briefly. The Brazilian government holds control over the inflation of the real; since the dollar was weak against the real, foreign exportation was reduced. The real has since devalued.
The significance of currency conversion does not solely pertain to the countries involved in the conversion; in today's global economy the economic status of any prominent nation directly affects the economies of others.
The effects of conversion rates on the economy are staggering; world conversions determine market, trade, investment and personal spending and standard of living. For instance, during the few years the real valued the dollar, the number of Brazilian travelers abroad nearly doubled, since international travel with a weaker currency is more expensive.
Because the conversion the real usually falls heavily in USD favor, the U.S. dollar in Brazil stretches much further. It would be advantageous to vacationing Americans or Europeans to travel to Brazil not only because the South American giant is a beautiful world destination, but also because the costs of lodging, food and shopping are much lower in conversion.
Even though conversion between the real and the dollar has significantly favored the latter throughout history, it is not to be taken as a steady indicator for the future. Brazil is a rapidly growing nation, and it is possible that in subsequent years the real will match if not surpass the U.S. dollar.
The Brazilian economy has shown monumental advancement in relatively few years, with annual GDP growth of 6 percent. Goldman Sachs has predicted Brazil will have the world's fifth-largest economy by 2050. Therefore, it is wise for those wishing to visit Brazil on budget to do it while they still can.