TITLE:
Dropping the Zeroes: Between Hope and Reality for Sierra Leone: A Critical Review of the Literature
AUTHORS:
Brima I. B. Kargbo, Emmanuel Y. Gbolonyo
KEYWORDS:
Sierra Leone, Currency, Redenomination, Macroeconomic Stability
JOURNAL NAME:
Modern Economy,
Vol.14 No.2,
February
28,
2023
ABSTRACT: Many developing and
transitional economies have attempted to embark on currency reforms including
redenomination. There are various reasons to redenominate a country’s currency
but the most important factor is inflation. The primary objective of this
research is to perform a critical evaluation of the literature in a bid to
broadly understand the efficacy of currency redenomination and why some
countries face the difficulty of redenominating several times in order to
attain stability but still not successful and lessons to be drawn in the
context of Sierra Leone. Based on the literature, redenomination will be
ineffective where it is employed on a very weak economy base or macroeconomic
stabilization policies are just underway. Redenomination is not a panacea to
economic woes as it does not work in isolation but is a component of other broad based macroeconomic
stabilization policies. Thus, redenomination is a means to an end and not an
end in itself.