Unidad de Fomento

The unidad de fomento is a special money used in Chile. It doesn't look like regular money - it's not a coin or a bill that you can hold in your hand. Instead, it's what we call a "unit of account."

Basically, this means that one unidad de fomento is equal to a certain amount of regular Chilean pesos. The amount changes every day, based on how much inflation there is.

The unidad de fomento was created to help Chileans deal with inflation. Inflation is when the prices of things go up over time, and it can make it hard for people to plan for the future. The unidad de fomento helps by keeping track of prices in a way that doesn't change as much as regular pesos.

So, let's say you want to rent an apartment in Chile. The landlord might tell you that the rent is 50,000 pesos per month. But if you sign a contract that says the rent will be paid in unidades de fomento instead, then the rent might be something like 200 unidades de fomento per month.

This helps because, even if the price of things is going up, the amount of unidades de fomento you need to pay for something will stay the same. It can help people plan for the future and make sure they can afford things, even if prices change a lot.