PYG (Paraguay Guarani)

DEFINITION of 'PYG (Paraguay Guarani)'

The currency abbreviation or currency symbol for the Paraguay guaraní (PYG), the currency of Paraguay. The Paraguay guaraní is made up of 100 céntimos and is often represented by a symbol that looks like the capital Latin letter "G" with a diagonal slash through the center of it. The "guaraní" is named after the Guaraní people - an indigenous group of people in South America, living in what is now Paraguay. Rampant inflation has devalued the céntimo to the point where it is no longer used.

BREAKING DOWN 'PYG (Paraguay Guarani)'

The Paraguay guaraní replaced the peso at a rate of 1 guaraní to 100 pesos in 1943. The currency was allowed to float freely until 1960, when it was pegged to the U.S. dollar. The peg was in place from 1982 to 1990. In 1990, this peg was removed and another peg was used from 1990 until 1998 to help reduce inflation. Since the removal of the peg in 1998, the currency has consistently dropped in value because of inflation. Political corruption is thought to be the main force behind the runaway inflation.