10 Cruzeiros – Brazil

In 1990, Brazil was engulfed in a profound monetary crisis, the culmination of a "lost decade" defined by hyperinflation, failed stabilization plans, and eroded public trust. The situation was dire: annual inflation soared to a staggering 7,000%, a rate so high it functioned as a daily economic tax, destroying savings, distorting prices, and forcing a frantic cycle of wage indexing and price adjustments. The root causes were deeply structural, stemming from massive public deficits financed by money creation, inertial inflation perpetuated by widespread indexation, and a legacy of external debt shocks from the 1980s.

President Fernando Collor de Mello, inaugurated in March 1990, responded with the radical and shocking "Collor Plan." Its most infamous measure was an 18-month freeze on roughly 80% of all private financial assets, including savings accounts, effectively confiscating liquidity to break inflationary expectations. The plan also introduced a new currency (the cruzeiro, replacing the cruzado novo), imposed temporary price freezes, and launched a program of trade liberalization and privatization. Initially, it succeeded in abruptly halting inflation, but at a tremendous social and economic cost, plunging the country into a severe recession.

However, the Collor Plan's success was short-lived. By the end of 1990, inflation had reignited because the government failed to address the fundamental fiscal imbalances driving the crisis. Public spending remained unchecked, and the temporary nature of the liquidity freeze meant the underlying inflationary pressures quickly returned. Thus, 1990 ended with the crisis unresolved, setting the stage for further failed plans and setting a precedent for extreme measures, until the eventual success of the Plano Real in 1994. The year stands as a stark example of the limits of shock therapy without sustained fiscal discipline.