The government had to impose capital controls to stop money from flowing out of the banking system because of the risk of redenomination
into new drachmas.
Would such a system have triggered a redenomination
from the euro to the drachma?
The 2007 redenomination
that removed four digits made the Ghana cedi the highest denominated currency unit used in Africa, but that was short lived for some few months, as it started falling to today.
That said, the last thing any president wants is to risk redenomination
and jeopardise the stability of the currency union.
On March 25, Bank of Korea Governor Lee Ju-yeol stated in an interview arranged by the National Assembly, "Our research team has carefully reviewed the effects of currency redenomination
and concluded that its net benefit is sufficiently large.
A rise in redenomination
risk premia of sovereign bond yields led again to a widening in the cost of funding for several stressed euro area countries.
The year 2007 saw the Ghanaian currency undergoing a redenomination
exercise as well as the adoption of International Financial Reporting Standards (IFRSs) by Ghanaian listed firms for the first time and also marked the beginning of the global financial meltdown.
In the event of redenomination
, the value of credit expressed in the new currency would increase.
The rise in T2 balances in 2011 and 2012 was accompanied by a sharp fall in eurozone periphery banks' external funding, suggesting a degree of perceived redenomination
risk for the periphery.
"The executive branch, after evaluating the proposal, has agreed to reschedule the start of the currency redenomination
SMC said proceeds of the P10 billion offering would be used for refinancing existing obligations including possible redenomination
of its dollar denominated debt and investments of its existing subsidiary in its various businesses.