Sebastian Cabot arrived in Paraguay in 1527, sailing up the River Plate searching for gold and silver. Paraguay was part of the Vice Royalty of Rio de la Plata until October 12, 1813 when it gained its independence from Spain.
Spanish Escudos were used in Paraguay while it was a Spanish colony. Most of the coins were minted in Potosi. The first Paraguayan coins were minted in 1845; however, issues of Paraguayan coins were infrequent in the nineteenth century since Paraguay relied on Argentinian and other coins for commerce.
The Argentine Peso (ARG) had full legal tender status in Paraguay until November 1943. The Paraguay Peso Fuerte (PYF) was set at par to the Argentine Peso throughout this period; however, Paraguay issued excessive amounts of banknotes, causing the paper Paraguay Peso (PYP) to depreciate relative to the Gold Peso.
The first depreciation occurred during the War of the Triple Alliance in which all the banknotes issued by Paraguay eventually became worthless. The Paper Peso issued after 1894 depreciated in line with the Argentina paper Peso. Paraguay reorganized its monetary system in November 1943, replacing the Peso with the Guarani (PYG), equal to 100 Paper Pesos and discontinued the legal statust of Argentine currency.
The Paraguay Peso was divisible into 8 Reales, 16 Medios or 32 Cuartillos until 1870, divisible into 100 Centesimos until 1881, and divisible into 10 Reales or 100 Centavos from 1881 until 1944. The Guarani is divisible into 100 Centimos. The government issued banknotes until 1943. The Banco de la Republica was established on December 26, 1907, which was succeeded by the Banco del Paraguay on February 22, 1936 and by the Banco Central del Paraguay on March 25, 1952. Each bank was the sole issuing authority during its time. |
