Accumulated IPCA was 775%, while the exchange rate of the North American currency went from R$1 to R$5.16, an appreciation of 416%
Since the creation of the Real Plan, the dollar has appreciated almost twice less than the inflation accumulated in the period. According to a survey by Austin Rating’s chief economist, Alex Agostini, the IPCA (Broad Consumer Price Index) was 775% from July 1994 to March 2026.
Even with this difference in inflation, the exchange rate did not fully follow the loss of value of the Brazilian currency. In July 1994, US$1 was equivalent to R$1. Today the dollar is at R$5.16 (as of March 10, 2026) – that is, an increase of 416%.
In simple terms: while the dollar has become around 5 times more expensive, prices in the Brazilian economy have become almost 9 times higher since the beginning of the Real Plan.
If US$1 in July 1994 were adjusted only for inflation accumulated in Brazil over these 3 decades, it would today have the equivalent value of R$8.74, according to Agostini’s calculations, considering the Ptax (average exchange rate calculated by the Central Bank) at the end of the 1st week of March 2026.
INFLATION IN BRAZIL X USA
Since the real plan, the CPI (US Consumer Price Index) has advanced 122% – 6 times less than inflation in Brazil.
If the initial value of US$1 were corrected only by the CPI over these 3 decades, it would today have purchasing power equivalent to around US$2.22. In this case, the corresponding exchange rate would be close to R$11.45.
The difference becomes even more evident when considering the inflationary differential between the 2 countries. If the exchange rate had fully reflected the distance between Brazilian and North American inflation since 1994, the dollar could be close to R$19.40 today – this would be the value necessary to maintain the same purchasing power as it was 32 years ago.
METHOD AND OBJECTIVE OF THE SURVEY
Economist Alex Agostini’s exercise considers the dollar as if it were a product or commodity, adjusted for inflation. The calculation disregards the dynamics of the exchange rate.
In practice, the dollar exchange rate is also influenced by factors such as:
- country risk;
- capital inflow and outflow;
- monetary policy;
- demand for foreign currency;
Therefore, the survey corrects the exchange rate only for accumulated inflation in Brazil and the United States, without incorporating variables. The way most economists use to analyze the value of the dollar adjusted for inflation is the real effective exchange rate, which adjusts the historical exchange rate for price changes over time. This indicator allows you to more clearly identify periods in which the dollar was relatively more expensive or cheaper in historical terms.
This report was produced by the Journalism trainee at Poder360 Camila Nascimento under the supervision of Brunno Kono.
