The history of the Brazilian currency is marked by constant changes, an unstable economy, and high inflation rates. Because of hyperinflation of past decades, Brazilian currency lost its value rapidly, and higher bills had to go into circulation. In the eighties and nineties, inflation rates forced the Banco Central (the equivalent of the Federal Reserve) to create new denominations, drop zeros from these bills, and redesign and rename the new currency quite a few times.
Because famous historical figures would adorn the bills, and these bills would lose their value so quickly, what was meant to be an honor became a source of ridicule. In later editions of Brazilian currency, images of beautiful species of flowers and native animals have been used.
As far as the name of the Brazilian currency, since 1986 it has gone from cruzeiro to cruzado, to cruzado novo, back to cruzeiro, then to cruzeiro real. Finally, in 1994 the Brazilian government overhauled its economy and adopted the real which, coupled with a more stable economy (the inflation rate is roughly 3 percent a year), has made Brazilians proud of their currency. Check out the site www.v-brazil.com/information/currency.html for more information on the history of Brazilian currency and up-to-date exchange rates.
Foreigners cannot buy products or services in Brazil with dollars, so you must exchange your money. In order to get reais you can go to a Casa de Câmbio, or currency exchange agency, found in many airports and urban centers. Banks will offer the same service, but with an extra fee, a much lower rate, and some disadvantage to the customer.
Here is a typical conversation that might occur at a bank exchange agency:
Q: Bom dia, senhor. (Good morning, sir.)
A: Bom dia, eu gostaria de trocar meus dólares. (Good morning, I would like to exchange my dollars.)
Q: Pois não, senhor, quanto o senhor gostaria de trocar? (Of course, sir, how much would you like to exchange?)
A: Não sei, acho que uns duzentos dólares. (I don't know, I think about two hundred dollars.)
Q: Pois não, senhor, a nossa taxa de câmbio está em torno de 2,134 reais, no câmbio oficial. (Of course sir, our rate is about 2.134 in the official exchange rate.)
A: Há alguma outra taxa? (Is there another tax or fee?)
Q: Sim, nós temos uma taxa administrativa, mas só de cinco reais por venda. (Yes, we have an administrative fee, but it's only five reais per operation.)
A: Está bom, então quero trocar os duzentos. (Okay, so I want to exchange two hundred.)
Q: Muito bem, só preciso do seu passaporte. (All right, I just need your passport.)
A: Aqui está. (Here it is.)
Finally, most banks in Brazil honor your major credit card, so if you don't want to bother with your getting travelers' checks, just use your credit card or ATM card at a local ATM and get reais. Your bank in the United States will calculate the withdrawal amount according to the daily posted exchange rates.