Peso has been a name of the Uruguayan currency since Uruguay's settlement by Europeans. The present currency, the peso uruguayo (ISO 4217 code: UYU) was adopted in 1993 and is subdivided into 100 centésimos.
The peso was replaced in November 1973 by the nuevo peso (new peso; ISO 4217 code: UYN) at a rate of 1 new peso for 1000 old pesos. The nuevo peso was also subdivided into 100 centésimos.
During the military rule, the peso was on a crawling peg to the dollar. A table of the future value of the dollar was published daily by the government (called the tablita). In 1982, the currency was devalued ("the tablita was broken"), throwing thousands of companies and individuals into bankruptcy. In the 1990s, a new mechanism to provide predictability was introduced, this time in the form of a sliding range, with top and bottom margins, at which the government would intervene. In 2002, after a banking crisis and amid a huge budget deficit, the currency was again allowed to float, losing almost 50% of its value in a couple of weeks, and, again, throwing into bankruptcy thousands of companies and individuals who held debts denominated in US dollars.
In 2004 a phenomenon completely new to most Uruguayans developed: the currency appreciated in nominal terms against the US dollar, going from 30 to 24 pesos to the dollar. By 2008 the peso reached 19 to the US dollar, recovering more than half of it's loss during the crisis. This revaluation brought protests from the industrial sector, which felt that it lost competitiveness. The government hopes that a floating currency will "de-dollarize" the economy. Uruguay does not seem to have found a mechanism that provides the exchange rate some level of predictability, while at the same time allowing the country to adapt its prices so that its exports remain competitive.
The 5 peso and 10 peso banknotes have been withdrawn from circulation, given the introduction of the coins of the same value.
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