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 a rate of 1 Guarani for 100 Pesos.
The Central Bank of Paraguay (Banco Central del Paraguay) is responsible for issuing and managing the Guarani.
Subdivisions and Denominations
The Paraguayan Guarani is not subdivided into smaller units, as its value has experienced significant inflation.
However, historically, the Guarani was subdivided into 100 smaller units called céntimos, but due to inflation, céntimos are no longer used.
Coins are issued in denominations of 50, 100, 500, and 1,000 Guarani, while 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 against other currencies is determined by market forces, such as supply and demand.
Factors that can affect the value of the Guarani include inflation, interest rates, economic growth, and geopolitical events.
Economy
Paraguay has a mixed economy, with significant contributions from the agricultural, industrial, and services sectors.
The country is a major exporter of soybeans, beef, and electricity, with the latter being produced by the Itaipú Dam, the world’s second-largest hydroelectric power plant.
Paraguay also has a large informal sector, which accounts for a significant portion of its economic activity.
Challenges and Prospects
Paraguay faces several economic challenges, including a high poverty rate, income inequality, inadequate infrastructure, and corruption.
Additionally, the country’s economy is highly dependent on the export of agricultural commodities, making it vulnerable to fluctuations in global commodity prices.
To ensure long-term economic stability and growth, Paraguay must invest in human capital development, improve its infrastructure, diversify its economy, and address governance and transparency issues.
The government has introduced various economic reforms and development initiatives to address these challenges and promote sustainable growth.
Summary
In summary, the Paraguayan Guarani is the official currency of Paraguay, managed by the Central Bank of Paraguay.
The currency is not subdivided into smaller units, but coins and banknotes are available in various denominations.
The Guarani has a floating exchange rate, and its value is determined by market forces. Paraguay has a mixed economy with significant contributions from the agricultural, industrial, and services sectors.
The country faces challenges such as high poverty rates, income inequality, inadequate infrastructure, and corruption but has introduced economic reforms and development initiatives to promote sustainable growth and address these challenges.