Economic Stability Reduces Dollar's Role in Brazil . . .

What a difference economic stability makes. Seventeen months ago, the dollar was king here in Brazil. US bills were hoarded as a hedge against chronic hyperinflation and a weak currency called the cruzeiro real.

Many kept their greenbacks under beds or in dressers before changing them on the black market, one of the most buoyant sectors of the nation's economy. In fact, each day, travel agents in the nation's major cities turned over millions in dollar sales. In downtown Sao Paulo, an electronic billboard flashed the illegal black-market rate for the inflation-free "verdinha," or "little greens," as many Brazilians affectionately dubbed the dollar.

Sales of expensive items such as apartments and cars were negotiated in US currency. Even kidnappers refused to negotiate ransoms in cruzeiros, asking their victims to pay in dollars.

When Rio secretary Eleida de Gois bought her Copacabana beach apartment early last year, she said she agreed on a dollar price with the owner, who then called a money-changer to find out that day's rate. "Then I had my bank wire the dollar equivalent to his cruzeiro account," she says.

But that was then.

Since President Fernando Henrique Cardoso introduced his economic stability plan last year, the dollar has lost much of its glitter.

All transactions are now in the new currency, called the real, which is actually worth more than the dollar at the current exchange rate of $1 to 96 centavos. A strong real has caused record consumption since Brazilians now have more money, can buy goods on installment plans, and pay with credit cards.

The reason for the turnaround is simple. President Cardoso's plan has slashed rampaging inflation from 50 percent a month in July 1994, to 1.2 percent last month. The annual rate this year is expected to be around 15 percent, the lowest since 1957.

"Let's face it, nobody wants dollars anymore," says Antonio Santos, who can legally sell up to $10,000 to any Brazilian tourist at his Rio KSK travel agency. "People now buy them only when going abroad."

Yet despite the economic reversal, some remain leery.

It is still common for foreigners to pay their rent in dollars to landlords who deposit their checks in overseas accounts. And Ms. de Gois says her father-in-law, who has seen seven currency changes in the past 30 years, still stashes dollars under his bed.

"He believes what's happening today isn't reality, that it can't last," she says. "He believes the dollar will soon be back on top."

Seventeen months ago, the dollar was king in Brazil. Today, with greater economic stability and lower inflation, transactions are in the real.