Paraguayan Guarani

PYG - Paraguayan Guarani

The Paraguayan Guarani (PYG) is the official currency of the Republic of Paraguay, a landlocked country in South America. The symbol for the Paraguayan Guarani is ₲ or Gs, and its ISO 4217 code is PYG. One Guarani is subdivided into 100 céntimos; however, céntimos are no longer in use due to inflation. The Central Bank of Paraguay is responsible for issuing and managing the PYG.

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Overview of the Paraguayan Guarani

The Central Bank of Paraguay oversees the issuance and regulation of the Guarani, ensuring its critical role in daily transactions, savings, and trade. Despite facing inflationary pressures over the years, the Guarani stands as one of the oldest continuously used currencies in South America, highlighting its enduring significance in the country’s financial system.

While inflation and economic challenges have occasionally affected its value and purchasing power, the Guarani remains a cornerstone of Paraguay’s economy. It reflects the nation’s resilience and stability, even in the face of adversity.

Though not a major player on the global financial stage, the Paraguayan Guarani symbolizes Paraguay’s increasing integration into regional and international markets. Its stability and adaptability are vital for the country’s economic growth, particularly in trade with key partners like Brazil and Argentina.

History and Development of the Paraguayan Guarani (PYG)

On October 5, 1943, the law for the issuance of the Paraguayan Guarani was enacted, replacing the Peso Fuerte at an exchange rate of 1 Guarani = 100 Peso Fuertes.

In 1944, the Paraguayan Guarani was officially issued for the first time. Between 1960 and 1985, the PYG was pegged to the US Dollar at a fixed exchange rate of 126 Guarani for 1 US Dollar.

In its early years, the Paraguayan Guarani maintained a stable exchange rate. However, global economic fluctuations heavily impacted its value. High inflation rates, coupled with rising public debt, caused the PYG to experience significant devaluation.

Today, the Paraguayan Guarani is one of the oldest currencies in South America. The Central Bank of Paraguay continues its efforts to combat inflation and stabilize the currency’s exchange rate.

Paraguayan Guarani denominations

The Guarani is issued in both banknotes and coins, with designs reflecting Paraguay’s rich history, culture, and prominent figures. Banknotes feature landmarks, national heroes, and symbols of Paraguayan identity, fostering a sense of pride and cultural heritage. Coins, though less commonly used in higher denominations, retain practical importance in smaller transactions.

Paraguayan Guarani Banknotes

  • ₲2,000

  • ₲5,000

  • ₲10,000

  • ₲20,000

  • ₲50,000

  • ₲100,000

Paraguayan Guarani banknotes feature color-changing ink, raised printing, and security strips to prevent counterfeiting. These features not only enhance security but also reflect Paraguay's advancements in printing technology. Each denomination showcases images of the nation's cultural and historical heritage.

Paraguayan Guarani Coins

  • ₲50

  • ₲100

  • ₲500

  • ₲1,000

The coins are designed to be durable and corrosion-resistant. They also feature intricate designs that depict symbols of Paraguay's cultural and historical heritage.

Current Exchange Rate of the Paraguayan Guarani

Currently, the exchange rate of the Paraguayan Guarani (PYG) against the US Dollar (USD) is:

1 PYG = 0.00013 USD

The Paraguayan Guarani holds a significantly lower value compared to the US Dollar, reflecting the country's underdeveloped economy. High inflation or weak monetary policies have contributed to reducing the strength of the currency in the financial market.

Factors Affecting the Value of the Paraguayan Guarani

The Paraguayan Guarani (PYG) is among the world’s lowest-valued currencies. Several factors contribute to its low value:

High Inflation in Paraguay

Paraguay frequently experiences high inflation, which reduces the Guarani's value. Inflation diminishes the purchasing power of the local currency compared to stronger currencies. While the Central Bank has implemented control measures, their effectiveness is limited, as exchange rates are influenced by multiple factors.

Reliance on Agriculture

Paraguay’s economy heavily depends on agricultural exports like soybeans, beef, and corn. This reliance, coupled with vulnerability to weather conditions, makes the economy unstable. A drop in agricultural commodity prices significantly impacts Paraguay’s economy and, consequently, the Guarani’s exchange rate.

Lack of Economic Diversification

Paraguay’s economy lacks diversification, being primarily centered on agriculture and raw goods. The industrial and service sectors are underdeveloped, leaving the country more susceptible to global economic fluctuations and competition from neighboring nations like Argentina and Brazil. This dependency weakens the Guarani's value.

Trade Deficits and Public Debt

Paraguay often imports goods and raw materials that it cannot produce domestically, leading to trade deficits. These deficits increase the demand for foreign currency, depleting reserves and negatively affecting the Guarani. Additionally, public debt restricts the country’s ability to maintain the currency’s value due to limited fiscal resources.

The Paraguayan Guarani faces significant pressure from both internal and external factors. While the Central Bank of Paraguay has made efforts to control inflation and stabilize the economy, structural economic weaknesses persist. Diversifying the economy, attracting investment in non-agricultural sectors, and strengthening the financial system are critical steps to enhance the Guarani’s value in the future.

 

Paraguayan Guarani - Stats

Name
Paraguayan Guarani
Symbol
Minor unit
0
Minor unit symbol
None
Top PYG conversion
PYG to EUR

Paraguayan Guarani - Profile

Coins
₲50 , ₲100 , ₲500 , ₲1000
Bank notes
₲2000 , ₲5000 , ₲10000 , ₲20000 , ₲50000 , ₲100000
Users
Paraguay

Frequently asked questions about Paraguayan Guarani

Live Currency Rates

CurrencyRateChange
PYG/USD
0.00012
PYG/EUR
0.00012
PYG/GBP
0.0001
PYG/EUR
0.00012
PYG/CAD
0.00018
PYG/AUD
0.0002
PYG/JPY
0.01999
PYG/INR
0.01101