Redenomination > Justification for Redenomination
Redenomination - Justification
2018 Bank of Sierra Leone. All rights reserved
Also of Interest...
The current currency regime imposes significant deadweight losses on the economy in the following ways:
High transaction costs of engaging in economic activity
The high cost of carrying huge quantities of currency in order to engage in transactions.
The costs of counting and storing huge quantities of cash on a daily basis by households, businesses, and financial institutions.
The huge cost the central bank incurs for printing huge stacks of currency whose value is less than the cost of printing them.
The high risks of carrying huge stashes on currency for transaction purposes.
Increasing difficulties in maintaining bookkeeping and statistical records.
Difficulties placed on payment systems (such as ATMs), specifically the delivery of banking services through a greater utilization of technology.
In the current instant, the huge currency-management costs imposed on the BSL by the massive hoarding of currency the country experienced from June, 2020-August, 2021.