1 Cruzado Novo (Republic of Brazil) – Brazil

In 1989, Brazil was in the final, chaotic phase of its decades-long struggle with hyperinflation, a period known as the "Lost Decade." The currency at the time was the Cruzado Novo, introduced just the previous year in 1988 as part of the failed "Summer Plan" (Plano Verão). This plan was the government's latest attempt to break the inflationary inertia through a currency conversion (1,000 old Cruzados became 1 Cruzado Novo), a temporary price freeze, and fiscal adjustments. However, like the Cruzado Plan before it, it lacked lasting structural reforms, particularly in addressing the massive public deficit and indexation of the economy.

The situation rapidly deteriorated throughout 1989. The price freezes were ultimately unsustainable and, once lifted, pent-up inflationary pressures exploded. Inflation soared to an annual rate of nearly 2,000%, effectively rendering the Cruzado Novo worthless as a stable store of value. Daily life was dominated by a frantic financial rhythm: wages were indexed and paid weekly or even daily, people rushed to spend money immediately, and a complex system of monetary correction (correção monetária) was embedded in every contract, further fueling the inflationary cycle.

This monetary chaos formed the turbulent backdrop for a pivotal political year—the first direct presidential election since 1960. The crisis framed the entire campaign, with candidates like Fernando Collor de Mello rallying against "marauding" public servants and promising shock therapy to stabilize the economy. The utter failure of the Cruzado Novo in 1989 set the stage for the radical measures that would follow, namely the Collor Plan in 1990, which would attempt to confiscate savings in a desperate bid to curb liquidity and finally conquer hyperinflation.