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The Unidades de Fomento is a unit of account. It is a non-circulating currency; the exchange rate between the UF and the Chilean peso is constantly adjusted for inflation so that the purchasing power of the Unidad de Fomento remains almost constant on a daily basis during low inflation. It was created on 20 January 1967, for the use in determining the principal and interest in international secured loans for development, subject to revaluation according to inflation. Afterwards it was extended to all types of bank loans, private or special financing, purchases and investments on installments, contracts, and some special situations. It is also used in legal standards such as the par value of stock and capitalization of companies, and fines.
It has become the preferred and predominant measure to determine the cost of real estate, values of housing and any secured loan, either private or of the Chilean government. Individual payments are made in Chilean pesos, according to the daily value of the UF. A similar currency unit for use generally in payment of taxes, fines, or customs duty is the Unidad Tributaria Mensual. Wikipedia
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