Currency and cash
The currency of Brazil is the real, pronounced hay-OW, and the plural is reais (not "reals"), pronounced hay-ICE. An "R" at the beginning of a Portuguese word is pronounced like an English "H" as in hotel, though you might hear a slight English "R" sound from the speech of some Brazilians.
The abbreviations used in Brazil are Rs or R$, e.g., Rs 3,40 or R$3,40. Notice that the centavos (cents) are separated by a comma, not by a period. I always use a period on this site to avoid confusion for readers from the US and Canada.
To be unambiguous in international transactions, the ISO currency code BRL would be used, e.g., BRL 3.40, but never for day-to-day business within Brazil. The ISO code (set by the International Standards Organization) is used by currency exchange websites (like xe.com), currency traders, programmers, and in other technical situations.
The coins in Brazil are .05, .10, .25, .50, and R$1. After that it's bills: R$2, R$5, R$10, R$20, R$50, and R$100. There always seems to be a shortage of small bills (R$2, R$5, R$10) to be given as change in stores. There's no lack of coins. If you pay with a R$50 or R$100, you are very often asked if you have a smaller bill.
- The name of the currency; pronounced hay-OW (not REE-ul)
- The correct plural in Portuguese; pronounced hay-ICE
- An incorrect plural and never used by Brazilians, but commonly seen outside of Brazil
- Abbreviation for real within Brazil, e.g. Rs 15,99
- Another common abbreviation for real within Brazil, e.g. R$15,99
- Abbreviation for real in finance but never used in shops and day-to-day life
Unlike the US and Canada, sales tax is always included in the price. Because it's invisible, most Brazilians have no idea of their sales tax rate. This makes transactions simpler, but also hides the cost of government. If you're curious, you can sometimes find the sales tax (more correctly called a value-added tax or VAT) on the receipt beside the line Val Aprox Tributos (see example). The tax on a mixed bag of groceries is about 30–35%, on books I've seen 10–20%, and 30–60% on clothes and shoes.
The smallest coin in circulation is 5 centavos (R$0.05). But plenty of prices end with .99 (e.g., R$5.99); and there are service fees, such as a 10% fee at some restaurants or a boarding fee on inter-city bus tickets for example. So prices sometimes do not end up as nice round numbers.
If you pay by credit card, you'll pay the exact price, but if you're paying in cash, prices are either rounded by the cash register, or by the cashier himself. If the price is R$10.37, you pay R$10.40.
The inflation rate in Brazil is currently about 6% and has been well controlled for over a decade — a far cry from 6000% hyperinflation of the early 1990's. If you're traveling for a month or two, you're likely to see greater variation in your buying power due to exchange rate fluctuation than due to inflation. For example, it wouldn't be unusual to get 5% more reais or 5% less reais for your dollars at the beginning and end of a one month stay.
Though cash is accepted for everything, the middle class and well-to-do charge everything to credit and debit cards. But cash is never refused, and it's usually the only option for street vendors and street fairs. There is still a very significant fraction of the population who pay in cash for everything.
A situation in which a visitor might need a lot of cash at once is when renting a furnished apartment for a month through a real-estate agent in Sao Paulo. The agent will want upfront the full month's rent and a security deposit equal to a full month's rent, and that the only way to pay it is cash (if you're a foreigner).
At most places, an offer to pay in US currency would be very unusual (unlike some Caribbean countries where US money is readily accepted). US dollars might be accepted for an airport taxi or a hotel, but you'll lose at least 10% on the exchange.
Since Brazilian currency is freely exchangeable, there is no black market for currency exchange (as in Argentina for example).
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