The Central Bank of Sierra Leone on Friday, July 1 introduced the country’s redenominated 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 September 30 this year, the Central Bank said.
Governor of the Bank of Sierra Leone Professor Keifala Murana Kallon said, “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.”
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.
The Bank governor said that redenomination can boost the confidence of people in the economy and its impact will be positive.
“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,” he said.
He maintained that redenomination might not solve the country’s economic problems, but through proper macroeconomic policies, it could reset the country’s currency to change the public perception about the country, providing another starting point for the country through economic reforms that addressed factors that led to the depreciation of the currency.
“We hope that as we do this, we will bring together macroeconomic policies, structural changes to the economy that will make this the last time of denominating the currency of this country,” Professor Kallon noted.
Speaking while launching the redenomination of the Leone, President Dr Julius Maada Bio urged financial institutions in the country to extend loan facilities to citizens with low-interest rates.
“The technical experts have made a strong case. There will be a simplification of accounting records and a significant reduction in cash volumes needed for transactions. The inconveniences and inefficiencies of using the old notes will be a thing of the past. We have removed three zeroes, but the money yesterday is of the same value as the money today,” he said.
He noted that his compatriots in the informal economy might struggle with transactions, using the new notes, adding that he would encourage the bank to intensify its sensitisation campaigns in the transition period and beyond. He also called for more people to access low-interest credit that would lead to inclusive and sustainable economic growth.
“Reach out to the ordinary citizen in the markets, places of worship, their communities, in the rural areas, in their villages and towns. Citizens must be informed fully about the new currency. It is only fair that citizens receive the correct exchange and transaction values for the old notes as we use them alongside the new Leones. This is also a civic duty of all of us to help our fellow citizens to get it right,” he said.
“Clearly, our politicians and self-righteous pundits will soon flood social media, radio, and TV programmes with all manner of negative noise about the new note and the intention behind introducing it. They will conjure conspiracy theories, doom and gloom stories, and some downright amusing explanations,” he said.
President Bio also used the occasion to advise some people against attempting to spread falsehoods about the value of the new note, clarifying further that the Le5 of the new notes would pay for the same goods and services that Le5,000 of the old notes were able to buy yesterday.
“As the Bank of Sierra Leone people have said, it is ‘New Money Same Value. New Notes; Same Value.’ The value of your pension, your debts, your rent, and your salary remain the same. I am honoured, therefore, at this time, to officially launch the New Leone, our new currency and legal tender in Sierra Leone,” he concluded.
Minister of Finance, Honourable Dennis K. Vandi thanked the Board of Governors of the Bank of Sierra Leone, their staff and other development partners who stood by the country throughout the process. He referred to the event as a landmark occasion that would present the country with another opportunity to grow its economy.
He further noted that extreme care and great efforts were put into the redenomination process with sensitisation of the public in every part of the country on facts that the new leones would enhance transactions for businesses, individuals, private sector, and public sector players.
By Sallieu S. Kanu