32

Dollarization is a process experienced by some countries whereby the high level of inflation prompt the use of stable foreign currency. Dollarization is widespread among developing countries that are subject to hyperinflation. In these countries, the weakened national currency loses at least one of its three traditional functions. Full dollarization is a specific case observed in some countries, where the government decides to replace the local currency with the US dollar. However, in most cases, dollarization is incomplete as the local currency is used alongside the foreign currency. The Democratic Republic of the Congo (DRC) is one such case. The country experienced several episodes of hyperinflation in the 1990s. This paper analyzes the nature and specificity of dollarization in the Congo.