Uruguayan Peso (UYU): What It is, Example

What Is the Uruguayan Peso (UYU)?

The Uruguayan Peso (UYU) is Uruguay’s national currency, introduced in 1993 to replace the nuevo peso. It is denoted by the symbol "$".

Denominations of UYU banknotes include $20, $50, $100, $200, $500, $1000, and $2000. Coins are available in values of $1, $2, $5, and $10.

Key Takeaways

• The Uruguayan Peso (UYU) is Uruguay’s national currency.
• Introduced in 1993 during an inflationary crisis.
• Uruguay has achieved high levels of economic development despite struggles in recent decades.

Understanding the UYU

The UYU was introduced in 1993 due to Uruguay’s recurring issues with inflation. After World War II, Uruguay devalued its currency twice. In 1975, they adopted the "nuevo peso," replacing their previous currency at a rate of 1000-to-1. Uruguay repeated this process in 1993, abandoning the nuevo peso in favor of the UYU at the same exchange rate.

Between 1984 and 1998, Uruguay faced double-digit inflation, with the highest rate surpassing 112% in 1990. Inflation has decreased significantly since then, ranging from 4.5% to 9% annually between 2005 and 2020.

Uruguay’s economic challenges were exacerbated by the severe depression in neighboring Argentina from 1999 to 2002. The depression had a substantial impact on Uruguay’s economy due to their close trade partnership. Unemployment in Uruguay exceeded 20% during this period, and inflation briefly spiked to nearly 20% before receding.

Real World Example of the UYU

In recent years, the value of the UYU has fluctuated compared to the USD. In 2003, it was valued at approximately $0.035 USD but rose to around $0.05 USD in 2008, 2010, 2011, and 2012. Since then, the UYU has depreciated relative to the USD, reaching a low of $0.022 in March 2020.

Tourism and commodity products such as wood pulp, beef, and soybeans are crucial to Uruguay’s economy. China is the largest customer, accounting for over 19% of all purchases, followed by Brazil at roughly 16.1%. With a per-capita GDP of approximately $22,400 USD, Uruguay is considered a high-income country. The nation also excels in measures like life expectancy, literacy, and quality of life indices.