ABSTRACT
On April 15,1979, Erwin Blumenthal, a retired German central banker, wrote a confidential letter to Jacques de Larosiere, then managing director of the International Monetary Fund (IMF). In the letter, Blumenthal described his experiences over the previous eight months as principal director and head of an IMF-sponsored team of experts working in the Central Bank of Zaire, in the central African country ruled by the autocratic but "pro-Western" Mobutu Sese Seko. When Blumenthal left the country in June 1979, Zaire had not had a viable agreement with the IMF for over a year. The United Slates and other Western governments only began to realize the seriousness and structural nature of Zaire's economic and fiscal crises after the first invasion of Zaire's Shaba province in 1977. In late December 1979, the Zairian government implemented a forced exchange of old currency notes for a smaller number of new notes to reduce money supply in the economy.
