Wednesday, April 17, 2024

Paraguayan Guarani (PYG)

The Paraguayan Guarani (PYG) is the official currency of Paraguay.

Named after the indigenous Guarani people, the currency was introduced on October 5, 1943, replacing the Paraguayan peso at an exchange rate of 1 guarani to 100 pesos.

The Central Bank of Paraguay (Banco Central del Paraguay) is responsible for issuing and administering Guaraní.

Segments and denominations

The Paraguayan Guaraní is not subdivided into smaller units because its value has experienced severe inflation.

Historically, however, guarani were subdivided into 100 smaller units called céntimos, but due to inflation, céntimos are no longer in use.

Coins are available in denominations of 50, 100, 500 and 1,000 guarani and banknotes are available in denominations of 2,000, 5,000, 10,000, 20,000, 50,000 and 100,000 guarani.

Exchange rate

The Paraguayan Guarani has a floating exchange rate, which means its value relative to other currencies is determined by market forces (such as supply and demand).

Factors that affect the value of Guaraní include inflation, interest rates, economic growth and geopolitical events.

Economy

Paraguay has a mixed economy, with agriculture, industry and services making significant contributions.

The country is a major exporter of soybeans, beef and electricity produced by the Itaipu Dam, the world’s second largest hydroelectric power plant.

Paraguay also has a large informal sector, which accounts for a large portion of its economic activity.

Challenges and prospects

Paraguay faces multiple economic challenges, including high poverty rates, income inequality, inadequate infrastructure, and corruption.

In addition, the country’s economy is highly dependent on agricultural exports and is vulnerable to fluctuations in global commodity prices.

To ensure long-term economic stability and growth, Paraguay must invest in human capital development, improve infrastructure, diversify the economy, and address governance and transparency issues.

The government has launched various economic reform and development initiatives to address these challenges and promote sustainable growth.

Summary

In summary, the Paraguayan Guaraní is the official currency of Paraguay and is administered by the Central Bank of Paraguay.

Currency is not subdivided into smaller units, but coins and banknotes come in many denominations.

The Guaraní operates a floating exchange rate and its value is determined by market forces. Paraguay has a mixed economy, with agriculture, industry and services making significant contributions.

The country faces challenges such as high poverty rates, income inequality, inadequate infrastructure and corruption, but has adopted economic reforms and development initiatives to promote sustainable growth and address these challenges.

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