Public Finance

Demonetization and currency swaps are powerful economic tools used by governments to address diverse policy challenges from inflation to terrorism and illicit economies. However, past experiences have demonstrated that the improper management of these measures can result in currency chaos and unintended consequences.

This policy brief examines lessons learned from failed attempts at managing effective demonetization and currency swaps. Such failures highlight the importance of adequate preparation and planning, seamless exchange mechanisms, consideration of the informal economy, and robust communication and public outreach.

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