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The official currency of Paraguay is the guaraní. It is named after the native people who lived in the country prior to Spanish colonization in the 16th century. Its international currency code is PYG. The guaraní used to be divided into 100 céntimos. However, the céntimo fell out of use in the 1960s due to inflation. No new céntimos coins have been issued since 1953.
The guaraní was originally created in 1943 and replaced the former currency, the peso, at a rate of 1 guaraní per 100 pesos. From 1960 to 1985, the Paraguayan government had pinned the value of the guaraní to the USD at a rate of 126 guaraní to 1 USD.
Paraguay has had severe problems with inflation throughout the years and guaraní banknotes have been issued in denominations up to 100,000 guaraní. While there is a government plan to replace the guaraní with the “nuevo guaraní” at a rate of 1000:1, this plan is currently suspended and the guaraní remains the official currency. Since 2003, the country has been experiencing greater economic stability, and inflation fell to a 30-year low of 4.3% in 2004. Over the past seven years the guaraní has, overall, appreciated against the USD, with 1 USD currently being worth approximately 4300 PYG.