"Prices of all goods and services will be deflated as three zeros will be slashed," Sierra Leone's Central Bank Governor Keifala Murana Kallon said.
The Central Bank of Sierra Leone on Friday started a redenomination of the country's currency, the Leone, with the removal of three zeros from the notes while keeping their value unchanged.
The existing currency shall continue to be legal tender, concurrently with the re-denominated currency, for a transition period of July 1 to Sept. 30 this year. Sierra Leone's Central Bank embarked on public engagement before circulating the new currency bank notes.
"Prices of all goods and services will be deflated as three zeros will be slashed. The new Leone will have the same purchasing power as the old Leone," Sierra Leone's Central Bank Governor Keifala Murana Kallon said, adding that the banking system in the country has re-calibrated its accounting systems to accommodate the new currency that is now in circulation.
Before the redenomination, the U.S. dollar-Leone exchange rate was around 1 to 13,000. The most common face value of the old Leone banknotes included 1,000, 2,000, 5,000, and 10,000. Under the new move, new banknotes with denominations of 1, 2, 5, 10, and 20 will be introduced.
"The redenomination of the Leone will enable our currency to appreciate against the dollar. The Leone will have more value and better serve our economy," the Bank governor said, stressing that redenomination can boost the confidence of people in the economy and its impact will be positive.
Blanche Gooding, President of the Institute of Chartered Accountants of Sierra Leone, said the value of the Leone has received knocks against the dollar and the rate of inflation continues to rise, and the fuel price increase has caused the increase of commodity prices.
"It is expected that the re-denomination will help address these challenges in the national economy. I hope that the re-denomination will give the Leone note its required value," she said.