All the sovereign independent countries in South America use their own currencies with Ecuador being an exception as Ecuador uses the US Dollar as its currency. None of the local currencies of the countries is widely recognized around the world. Each of those is accepted in the home country and are used for internal commerce within those countries. Also, these local currencies aren’t accepted by the neighboring countries. The two exceptions to this in South America is Ecuador that comprises of United States Dollar as its legal tender while the territory of French Guiana uses the Euro. Brazilian real is the only national currency of South America that occupies space in the top 20 most traded currencies of the forex market. Primarily located in the southern hemisphere, to the south of North America, South America accounts for 6.89 million populations that scatter into 12 independent countries, 1 French overseas region, and 2 British Overseas Territories. Except for Ecuador, the other 14 countries use their own currency. Let us now take a closer look at the currencies of territories and nations of South America.
The Currencies of South American Sovereign Independent Countries
The list of currencies of the 14 independent sovereign countries of South American continent and their currencies are: Argentina- Argentine Peso, Brazil- Brazilian Real, Bolivia- Bolivian Boliviano, Columbia- Columbian Peso, Chile- Chilean Peso, Ecuador- US Dollar, Paraguay- Paraguayan, Guaraní Guyana- Guyanese Dollar, Peru- Peruvian Nuevo Sol, Uruguay- Uruguayan Peso, Venezuela- Venezuelan Bolivar, Suriname-Surinamese Dollar. Each of these currencies of North America is recognized as an assigned code, as per the ISO 4217 currency codes.
Strongest South American Currencies
At present, Brazilian Real is one of the strongest South American currencies. During the administration of the prime ministers Luis Inacio Lula Da Silva as well as Dilma Rousseff, the value of Brazilian Real increased by almost three times. This shift in the currency’s value resulted in large population in the middle-class household as well as increased minimum wage salary. Following the Brazilian Real, the Chilean Peso is the other strong South American currency. However, a strong currency for Chile signifies promotion of cheaper imports to the economy, as the cheap imports undercut the domestic manufacturing industry effectively. Additionally, the currency of Chile i.e. Chilean Peso resulted in a considerable increase in the inflation rate that has a negative impact on the lower and middle socioeconomic classes. During the year 2002, the government of Chile disclosed a plan for investment in $12 billion foreign reserves and this gradually resulted in the downfall of the currency value of the country.
The Currencies of South American Dependent Territories
There are three dependent South American Territories namely Falkland Islands, French Guiana with Falkland Islands pounds, Euro as their currencies respectively. However, South Georgia and the South Sandwich Islands have no currency as the region does not have any permanent inhabitants.
The Falkland Island Pound
Falkland Island is a British territory and the currency Falkland Island Pound is used throughout the island however, the currency here at Falkland Island can interchangeably be used with the British pound as well. But Britain, on the other hand, does not permit the usage of Falkland Island pound there. The Falkland Island pound has been subdivided into 100 pence similar to the 100 cents since the year 1971. The denominations of the coins that have been into circulation include 1,2,5,10 and 50 pence in the year 1974 then 20 pence in 1982, 50 pence were introduced in 1980 and 2 pounds was introduced in 2004. Apart from this in the year 1983. ½ penny coin was also introduced but was withdrawn within a short period of time.
Being an overseas region of France the French Guiana uses the Euro as its currency since the year 2002. This is due to the reason that it is the member country of the European Union as well as the Eurozone. Before the adoption of the Euro as its currency i.e. prior to 2002, French Guiana had its own currency named as French Guiana Franc. During the year 1888-1962, the French Franc and French Guiana Franc were interchangeably used for conducting businesses. Special notes were circulated to be used in French Guiana, Martinique and Guadeloupe during the year 1961- 1975. During this time, those departments were called French Antilles. In the South Georgia and South Sandwich Islands, there are no permanent inhabitants and this is the reason that the territory has no currency. However, a research base and a museum are administered here with the staff by the British Antarctic Survey. Additionally, the island is inhabited by the British Postmaster and the British Government Officer and they make use of the British Pound there.