The Myths and Realities of Redenomination: A Case Study of Sierra Leone

The study aims to determine the impact of redenomination on the economy of Sierra Leone and also to explain believes and realities of redenomination process. The study utilizes secondary data that were obtained from World Bank reports, other articles and commentaries on redenomination. A qualitative analysis was utilized in the study.

This research paper, additionally examines the redenomination practices in several countries in the world, and the study have shown that the best time for redenomination is the beginning of economic growth or a radical restructuring of the economy after hyperinflation is stopped. Redenomination will not be effective if it is not accompanied by economic growth, which means inflation control, GDP growth, a decrease in unemployment, balancing the country's balance of payments, etc.

The paper has further illustrated the need to strengthen monetary policy practices because of the special importance of the Central Bank in economic management and the diversity of stakeholders’ expectations. The empirical findings of this study are glaringly consistent with the guidelines developed by the Central Banks’ in rolling out the redenomination process.