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Thursday, July 16, 2020 | History

2 edition of Exchange rate arrangements in the CFA franc zone found in the catalog.

Exchange rate arrangements in the CFA franc zone

David Leland Dibley

Exchange rate arrangements in the CFA franc zone

alternatives to fixed parity

by David Leland Dibley

  • 384 Want to read
  • 3 Currently reading

Published by INSAH, CILSS in [Bamako?] .
Written in English

    Subjects:
  • Foreign exchange rates -- Africa, French-speaking,
  • Monetary policy -- Africa, French-speaking,
  • French franc area

  • Edition Notes

    StatementDavid Leland Dibley.
    SeriesMonographies sahéliennes -- 8
    Classifications
    LC ClassificationsHG3897.4 .D54 1996
    The Physical Object
    Pagination35 p. ;
    Number of Pages35
    ID Numbers
    Open LibraryOL23731120M
    LC Control Number2009476046

    The CFA franc, currency for 13 West and Central African countries (the CFA zone), has been tied to the French franc via a fixed exchange rate arrangement since Proponents of the fixed parity rate argue that it provides price stability for the African countries, while opponents contend that it contributes to poor economic performance by Author: David Leland Dibley. The Impact Of The Euro-CFA Franc Zone On Economic Growth In Sub-Saharan Africa Juliet U. Elu1 Gregory N. Price2 Abstract This paper examines the effects of regional euro-currency integration on economic growth in Sub-Saharan Africa. As having a currency pegged to the euro is likely to be a source of shocks to output, we parameterize a.

      The currency was pegged to the French franc, with France alone able to determine the exchange rate. The arrangement remains much the same 70 years later. Technically, two separate CFA francs are in circulation, each with its own central bank, in Central and West Africa. Starting from , due to the appreciation of the euro against the dollar, the CFA franc (CFA) has gradually appreciated against the dollar. The misalignment curve of the CFA seems closely linked to the exchange rate euro/dollar except in the case of price increases .

      At present, the arrangement of France to the two unions are a fixed peg to the euro, a convertibility guarantee by the French Treasury and lastly, a set of legal, institutional and policy requirements. The CFA franc zone links three currencies: the two unions and the euro. The CFA franc is fixed at per : Mariamawit Tadesse. Get this from a library! The CFA franc zone and the EMU. [Michael T Hadjimichael; M Galy; International Monetary Fund. African Department.] -- Annotation Whether the prospective shift of the peg of the CFA franc to the euro would constitute an exchange rate arrangement with EMU countries would depend critically on the interpretation of.


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Exchange rate arrangements in the CFA franc zone by David Leland Dibley Download PDF EPUB FB2

The most important are that (1) at least 20 percent of sight liabilities of each central bank must be covered by foreign exchange reserves, (2) at least 50 percent of foreign exchange reserves must be held in the operations account;2and (3) increasing interest rate penalties apply if there is an overdraft.

About one-third of countries covered by the IMF's African Department are members of the CFA franc zone. With most other countries moving away from fixed exchange rates, the issue of an adequate policy framework to ensure the sustainability of the CFA franc zone.

The CFA franc, currency for 13 West and Central African countries (the CFA zone), has been tied to the French franc via a fixed exchange rate arrangement since Proponents of the fixed parity rate argue that it provides price stability for the African countries, while opponents contend that it contributes to poor economic performance by sending incorrect signals to the domestic economy.

About one-third of countries covered by the IMF's African Department are members of the CFA franc zone. With most other countries moving away from fixed exchange rates, the issue of an adequate policy framework to ensure the sustainability of the CFA franc zone is clearly of interest to policymakers and academics.

However, little academic research exists in the public domain. This book. About one-third of countries covered by the IMF's African Department are members of the CFA franc zone.

With most other countries moving away from fixed exchange rates, the issue of an adequate policy framework to ensure the sustainability of the CFA franc zone is clearly of interest to policymakers and academics.

However, little academic research exists in the public domain. Economic rationale of the exchange rate and monetary agreements concluded or endorsed by the Community: theoretical aspects 14 4. Formal exchange rate agreements with third countries or territories 17 The CFA franc zone 17 a) The CFA franc zone as two separate currency unions 18 b) The legal basis of the EC Council Decision 19File Size: 2MB.

Downloadable. Whether the prospective shift of the peg of the CFA franc to the euro would constitute an exchange rate arrangement with EMU countries would depend critically on the interpretation of the free convertibility of the CFA franc guaranteed by France.

Nonetheless, this shift is likely to leave the CFA franc arrangements and operating features of the zone essentially unchanged. l’éc o en bref The CFA franc zone Key facts The CFA franc zone is an economic and monetary area bringing together France and 15 countries in Sub-Saharan Africa.

This area is built on an institutional framework and a fixed exchange rate. The CFA franc zone thus fosters economic growth and monetary and financial stability. In Africa: Understanding the CFA Franc and its Foreign Exchange Rate Impact By Frances Coppola It is perhaps not widely known that in Africa, there is a country currency union – one that is so closely related to the Eurozone that foreign exchange rate risk can be negligible on trade between those countries and the Eurozone.

2 The franc zone – July The franc zone – July The colonial period Although it acquired its name relatively recently, i.e. in 19 9 with the setting up of foreign exchange controls, the franc zone was in fact created well before the Second World War. In the French. Exchange rates for the CFA BCEAO Franc against foreign currencies from Africa are displayed in the table above.

The values in the Exchange Rate column provide the quantity of foreign currency units that can be purchased with 1 CFA BCEAO Franc based on recent exchange rates.

This chapter reviews the history of the CFA Franc Zone, and discusses whether membership in the zone has supported economic growth and reduced the need for economic adjustment. It concludes that the zone is not an optimal currency area and that the costs of belonging to it outweigh its benefits.

It then assesses the alternatives to the fixed parity rate between the CFA franc and the : Jean-Claude Tchatchouang. The table currently shows historical exchange rates for US Dollars per 1 CFA BEAC Franc.

Invert the table to see CFA BEAC Francs per 1 US Dollar. Export to Excel. Export this data to a CSV file which can be imported by Microsoft Excel.

Current CFA BEAC Franc Exchange Rates. facts on aid and the real exchange rate in the countries of the CFA zone. Section 3 discuses the model and the methodology employed. Section 4 presents and analyses the econometric results. Finally, section 5 concludes and provides some policy recommendations.

FOREIGN AID AND THE REAL EXCHANGE RATE IN THE CFA FRANC ZONE: SOME FACTSCited by:   About one-third of countries covered by the IMF's African Department are members of the CFA franc zone.

With most other countries moving away from fixed exchange rates, the issue of an adequate policy framework to ensure the sustainability of the CFA franc zone is clearly of interest to policymakers and : Paperback. This paper presents an empirical analysis of the relationship between foreign aid inflows and the real exchange rate in the countries of the CFA Franc zone.

Using panel data analysis we find that foreign aid inflows are associated with the appreciation of the real exchange rate in the CFA Cited by: As we know, the main features of the franc zone are the fixed exchange rate, formerly with the French franc, now with the euro; the centralisation of our reserves in an “operations account” with the French treasury, from which France’s guarantee of unlimited convertibility of the CFA franc derives; and the freedom of transfers within the.

Because exchange rate arrangement are important for growth, trade, and inflation (C. Reinhart and K. Roggoff, (), and I. Fischer ()), and despite the lack of established causation, the combination or interference of inadequate policies/institutional principles (fixed exchange rate, restrictive monetary policies, etc) in the CFA Franc.

4 Since the last devaluation of the CFA Franc inthe fixed exchange rates are FF 1 = CFA and Euro 1 = CFA 5 All member states of the CFA Franc zones are Sub-Saharan African countries and all but Guinea-Bissau andFile Size: KB.

These two CFA francs have the same exchange rate with the euro (1 euro = XOF = XAF), and they are both guaranteed by the French treasury (Trésor public), but the West African CFA franc cannot be used in Central African countries, and the Central Africa CFA franc cannot be used in West African countries.

The pillars of the CFA franc. Like other colonial empires – the UK, with its sterling zone, or Portugal, with its escudo zone, France had its franc zone. The CFA franc – originally the French African Colonial franc – was officially created on 26 December by a decree of General de Gaulle.Remarkably, the exchange rate versus the French franc (the euro, now)—the anchor currency—was changed only once in 1 The purpose of this paper is to investigate the working of the monetary union in the CFA franc zone and to test whether countries in the zone form an optimum currency area (OCA) in comparison to those of the European Cited by: The role of the euro in Sub-Saharan Africa and in the CFA franc zone by Martin Hallet These fifteen countries are referred to as the African franc zone whose exchange rate arrangements are backed by the French Treasury within the limits of a number of safeguards.

In addition, Cape Verde has an exchange rate cooperation agreementFile Size: KB.