50 Pesos (José Enrique Rodó) – Uruguay

In 1971, Uruguay's currency situation was characterized by severe instability and accelerating inflation, marking a critical point in the country's long-standing economic decline. This was the culmination of structural problems dating back to the 1950s, as the traditional export-led model based on wool and beef stagnated. Chronic fiscal deficits, financed by money creation from the Central Bank, had led to persistent inflation throughout the 1960s. By 1971, under President Jorge Pacheco Areco's de facto wage and price controls, these pressures erupted into a full-blown crisis, with the Uruguayan peso experiencing rapid devaluation and a sharp loss of public confidence.

The government's response was a complex web of exchange controls and multiple exchange rates in an attempt to manage the balance of payments and shield key sectors. Alongside an official rate, there existed a financial exchange rate and a black market, where the peso's value was significantly weaker. This system created distortions, encouraged speculation, and led to capital flight as citizens and businesses sought to protect their assets from eroding purchasing power. Inflation soared to approximately 35% annually, severely eroding wages and savings, and contributing to widespread social and political unrest.

This deteriorating economic backdrop, with its currency instability and inflationary spiral, was a central factor in the radicalization of politics and the erosion of democratic stability in Uruguay. The crisis fueled support for the leftist guerrilla movement, the Tupamaros, and intensified demands from both workers and the industrial elite for decisive action. Ultimately, the inability to resolve the monetary and fiscal crisis contributed to the conditions that led to the presidential crisis of 1972 and, the following year, the military coup that would establish a dictatorship lasting until 1985.