Remontisation

Remontisation, sometimes spelled remonetisation, is the process by which a monetary system reasserts the role of the domestic currency as the primary medium of exchange, unit of account, and store of value after a period of erosion of monetary sovereignty. It is typically discussed in economies that have experienced currency substitution, heavy use of foreign currencies, or destabilizing inflation, and aims to restore confidence in the national currency and in a central bank’s policy framework.

The core objective is to reduce currency substitution and to rebuild the monetary transmission mechanism so that monetary policy can effectively influence inflation and output. Policy measures associated with remontisation include strengthening central bank independence, adopting or reinforcing a credible inflation-target regime, and steps to promote the domestic currency in prices and wages. Regulatory actions may limit foreign currency deposits, reform financial markets to deepen domestic-finance channels, and improve payment systems to favor the domestic currency.

Remontisation can be part of a broader stabilization and reform program following a financial or balance-of-payments crisis. While it can support price stability and monetary sovereignty, it may entail short-term costs, such as higher interest rates, increased debt service, or economic adjustment pressures. The concept is primarily used in macroeconomic policy discussions and is not a single, universal policy package; its specific contents vary by country context. Related ideas include monetary sovereignty, de-dollarization, currency substitution, and inflation targeting.