The Superior Court of Justice, Brazil’s second-highest judicial body, resumes on Wednesday a trial to determine whether citizens who lost money during the multiple adoptions of a new currency in the 1980s and 1990s can still demand restitution from the government. According to court estimates, a ruling in favor of citizens would impose a USD 32 billion liability on the federal government and could spark a wave of lawsuits totaling in the tens of thousands.
In the late 1980s and early 1990s, Brazil changed currencies on multiple occasions as governments tried to tame hyperinflation. Economic plans also included price controls and sky-high interest rates. In 1990, the government even decreed the forfeiture of savings accounts to control the amount of money circulating in the economy.
All of these measures failed miserably and inflation was only controlled after Brazil created the Real in 1994, which continues to be Brazil’s currency until today. Thousands of people sued the government for losing money as a side effect of the monetary reforms.
The case has lingered in superior courts since 2009. So far, one justice has sided with the government, and two against it. Another 12 are still to vote.