The CLF, or Chilean Unit of Account (UF), is a unique financial tool in Chile that is not represented by physical banknotes or coins. Instead, it’s an inflation-indexed unit of account, meaning its value is adjusted daily to reflect changes in the Consumer Price Index (CPI). Introduced in 1967, the UF’s primary purpose is to provide a stable measure for long-term contracts, such as loans, mortgages, and rental agreements, protecting against the corrosive effects of inflation that have historically plagued Latin American economies.

One intriguing aspect of the UF is its role in both public and private financial sectors. It’s commonly used in real estate transactions and for pricing products like educational services and land. Thanks to the UF, Chileans can engage in these transactions without worrying about sudden inflationary shifts, fostering economic stability and confidence. This makes the UF an innovative solution to economic volatility, demonstrating how a currency doesn’t have to be tangible to be pivotal in safeguarding a nation’s financial health.