The guarani is the official currency of the Republic of Paraguay, a landlocked nation of South America southwest of Brazil. The guarani is a decimalised currency, but after years of inflation the hundredths subunit, the centimo, no longer circulates. The guarani has been the currency of Paraguay since 1944, replacing the Paraguayan peso.
The issuing authority of the guarani is the Banco Central del Paraguay. Coins are minted by the Banco Central del Paraguay in denominations of 50, 100, 500 and 1000 guarani. Banknote printing is outsourced to Giesecke & Devrient in Germany and De La Rue in England. Banknote denominations commonly circulated are in denominations of 2000; 5000; 10,000; and 20,000 guarani.
As of August 2011, the guarani is the least-valued currency in the American continents, trading with the Australian dollar at around 4042 PYG: 1 AUD. Plans have been made to revalue the currency late in 2011 at a rate of 1000 current guarani: 1 new guarani. When the revaluation transpires, a two-year transition period will begin with the new guarani being denoted by the symbol N₲. Current banknotes with three zeroes crossed out will serve as legal tender until new banknotes can be printed and distributed.
Paraguay became fully independent in 1842 and the Paraguayan peso was introduced as the nation’s currency in 1856. The peso was initially subdivided into 8 reales, but it was decimalised in 1870. The guarani replaced the peso in 1944 at a rate of 1 guarani: 100 pesos. The guarani was pegged to the U.S. dollar in 1960 at 126 PYG: 1 USD, but was floated in 1985.
The Central Bank of Paraguay, or Banco Central del Paraguay, was established in 1952, and it was reorganized in 1995 into a modern central bank in a two-tier banking system. The central bank is responsible for issuing currency, managing foreign reserves and overseeing foreign exchange.
The economy of Paraguay is largely informal. Imports and exports are an important part of this informal economy where goods are imported from one country and exporting again to others. Despite the informal aspect of the economy, Paraguay had the highest annual GDP growth of any country in the South America from 1970 to 2009, averaging at 7.2 percent and at 14.5 percent in 2010 alone. Agriculture is also important in Paraguay, and the country is the sixth-largest producer of soybeans in the world.