The official currency of Paraguay until 1856 was the real. To start with, the Spanish colonial real circulated, this was supervened, in 1813, by the Argentine real. Paraguay started issuing its own reales in 1845. Sixteen silver reales for one gold escudo. The Paraguayan peso was introduced in 1856, worth 8 reales. The real continued to circulate as the subdivision of the peso until 1870, when Paraguay decimalized.
Copper coin worth 1⁄12 real piece, was the only one issued for Paraguay in this currency , impregnated in 1845. These coins were devalued to 1⁄24 real in 1847.
The currency of Paraguay between 1856 and 1944 was the peso. It exchanged the real at a rate of 8 reales equal 1 peso. Until 1870, the peso was subdivided into 8 reales. Paraguay then decimalized, with 100 centésimos equal 1 peso. The subdivision was renamed in centavo in 1874. Then the peso was changed in 1944 by the guaraní at a rate of one hundred to 1.
The guaraní (PYG) is the national currency of Paraguay. The guaraní was divided into 100 céntimos but, because of inflation, céntimos are not applicable anymore.
The law creating the guaraní was passed on 5 October 1943, and exchanged the peso at a rate of 1 guaraní = 100 pesos. In 1944 the first guaraníes were issued. Between 1960 and 1985, the guaraní was linked to the United States dollar at 126 PYG to 1 USD.
Currently, the guaraní is the least valued currency unit in the Americas, 1 USD worth close to 5400 guaranies.
In 2011, plans were released under which the Paraguayan guaraní would be revalued as the Nuevo guaraní (PYN) in the ratio of 1000 for 1, but due to possible confusion and problems with the projects, it is currently suspended.