The psychological part of it was really not 100% the cause of its effectiveness a part of the reality of why it worked is the government couldn't print more URV.

This is why it was a great trick, it was a trick to the people but also a trick to the government.

Basically it was a double jedi mind trick.

Inflation is just as much about public confidence as it is about the actual amount of money in circulation. That money doesn't have intrinsic value. People give it value by using it.

The claim is that public in the government-issued currency (what ever they renamed it to) was nil. This 'hack' brought back public confidence by saying that it wasn't "really" a currency. Once public confidence built up for the URV, they merged the "not currency" with the real currency, riding the coat tails of that confidence.

The problem with a new traditional currency is that Brazil had already gone through many currency changes[1] during the hyperinflation period so just doing that wouldn't work anymore. Supermarket owners got used to a pattern of bumping prices everyday by 2%, contracts worked so that payments were adjusted by the official inflation rate and so on. By switching to URV, you stop this "inertial inflation": supermarkets didn't have to relabel their prices every day, contracts went back to having fixed values for payments, etc.

Before the introduction of the Real, there were 5 occasions when they introduced a new currency to "cut three zeroes" from the old currency. It really got out of control in the 80s and early nineties and there was even a point where they resorted to just stamping the old bills instead of printing new ones.

A fun side effect of all of this is due to all the currency changes and to the need of printing bank notes with higher and higher numbers, they ran out of famous people to put on the bank notes. By some point they starting using general themes like "Gaucho cowboy" or "Bahia woman" on the bank notes and the current Real has pictures of native animals.

http://www.dplnumismatica.com.br/tabcedcruzreal.html

http://www.dplnumismatica.com.br/tabcedreall.html