Chilean Unidad de Fomento
The Unidad de Fomento (UF) is a Unit of Account belonging to Chile. It does not have any coins or banknotes. Its value is related to the Chilean Peso and today (2014), the exchange rate fluctuates according to the rate of inflation. The Unidad de Fomento is used to price things like mortgages, loans, taxes, rent etc. Things priced in Unidad de Fomento will remain at a fixed Unidad de Fomento price but the exchange rate to Pesos will fluctuate. For example, if the rent of a house is 20UF a month, the actual amount paid in Pesos each month will vary according to the UF exchange rate from month to month.
The Unidad de Fomento was first established on 20 January 1968 to help understand the value of international loans that needed to be re-valued according to changes in inflation. Today, it is used to value Real Estate, property and secured loans.
- 20 January 1968
- Banco Central de Chile