Cruzado Plan
The plan was praised by newspaper and politicians, such as José Serra, Maria da Conceição Tavares, Plínio de Arruda and Aloízio Mercadante.
[9][10] In addition to Dilson Funaro, other economists were involved in drafting the plan, such as João Sayad, Edmar Bacha, André Lara Resende and Persio Arida.
On January 16, João Sayad, Persio Arida, André Lara Resende, Oswaldo de Assis and Jorge Murad (President Sarney's son-in-law) voted in favor of the project; Dilson Funaro, João Manuel Cardoso de Mello, Luiz Gonzaga Belluzzo, Andrea Calabi and Edmar Bacha considered it too risky.
According to Hérica Lene:[12]Hyperinflation created turmoil in people's daily lives, in everyday tasks.
Regarding bonds without an indexation clause, it was established that as of March 3, 1986, the cruzado would have a daily appreciation of 0.45% in relation to the cruzeiro, equivalent to a monthly inflation of 14.42% of the old currency.
The National Treasury Bond - OTN (Portuguese: Obrigação do Tesouro Nacional) was created to replace it, and its price was frozen until March 3, 1987.
[19][20] Wages were converted to cruzados at their real average values, according to the IBGE's National Consumer Price Index (IPCA).
[21] Rents, installments from the Housing Finance System (Portuguese: Sistema Financeiro de Habitação) and school fees were converted into cruzados according to the real average value principle.
Products sold with 30 days had a real increase of 17%, the average inflation of the time built into the prices.
Pérsio Arida apologized for his mistake, claiming that he had examined Argentina and Israel, which were experiencing hyperinflation but had no forward sales.
[23][24] The government was not responsible enough to control its spending, which led Brazil to lose large amounts of international reserves.
For many oppositionists, such as Delfim Netto, the Cruzado Plan was inconsistent, populist and aimed only at increasing the popularity of the government and its candidates during the election.
[24][23] Many lawsuits demanding compensation from banks and governments for the monetary losses they suffered arose because of the Cruzado Plan.
The project also caused a deterioration in Brazil's balance of payments, which resulted in a collapse in international reserves.
At the end of July, the Cruzado Plan II was decreed; car and fuel prices were increased by 30%, while the government continued to talk about "zero inflation".
[27][28][29] From July to October 1986, the government remained silent about the increasing scarcity of products and the deterioration of external accounts.
