European forex monetary union history and consequences
The CFA franc in French: The two CFA franc currencies are the West African CFA franc and the Central African CFA franc. Although theoretically separate, the two CFA franc currencies are effectively interchangeable. Both CFA francs have a fixed exchange rate to the euro: Although Central African CFA francs and West African CFA francs have always been at parity and have therefore always had the same monetary value against other currencies, they are in principle separate currencies.
They could theoretically have different values from any moment if one of the two CFA monetary authorities, or France, decided it. Therefore, West African CFA coins and banknotes are theoretically not accepted in countries using Central African CFA francs, and vice versa.
However, in practice, the permanent parity of the two CFA franc currencies is widely assumed. CFA francs are used in fourteen countries: These fourteen countries have a combined population of The currency has been criticized for making economic planning for the developing countries of French West Africa all but impossible since the CFA's value is pegged to the euro whose monetary policy is set by the European Central Bank.
The CFA franc was created on 26 Decemberalong with the CFP franc. The reason for their creation was the weakness of the French franc immediately after World War II. When France ratified the Bretton Woods Agreement in Decemberthe French franc was devalued in order to set a fixed exchange rate with the US dollar. New currencies were created in the French colonies to spare them the strong devaluation, thereby facilitating exports to France.
The CFA franc was created with a fixed exchange rate ip forex broker the French franc.
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This exchange rate was changed only twice: The and events were merely changes in the currency in use in France: The value of the CFA franc has been widely criticized as being too high, which many economists believe favours the urban elite of the African countries, who can buy imported manufactured goods cheaply at the expense of farmers who cannot easily export agricultural products.
The devaluation of was an attempt to reduce these imbalances.
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Over time, the european forex monetary union history and consequences forex trading software development countries and territories using the CFA franc has changed as some countries began introducing their own separate currencies.
A couple of nations in West Africa have also chosen to adopt the CFA franc since its introduction, despite the fact that they were never French colonies. In stock market crash results, in anticipation of Economic and Monetary Union of the European Unionthe Council of the European Union addressed the monetary agreements France has with the CFA Zone and Comoros and ruled forex trading course dvd. There are two different currencies bollinger bands formula metastock the CFA franc: They are distinguished in French by the meaning of the abbreviation CFA.
These eight countries have a combined population of These six countries have a combined population of InCentral African CFA banknotes were issued with an obverse unique to each participating country, and common reverse, in a fashion similar to euro coins. Equatorial Guineathe only former Spanish colony in the zone, adopted the CFA in From Wikipedia, the free encyclopedia.
West African CFA franc. Central African CFA franc.
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Since most of the countries that use the currency are poor, mostly agricultural economies, this has put a stranglehold on their trade and made them overly dependent upon continuing, privileged access to French and, though them, European markets.
That this effectively recreates a quasi-colonial trading relationship between France and its former African colonies that benefits France mightily has not been lost on observers.
The CFA Franc aka The African Euro, By Jeffrey Cavanaugh AFKI Original Published: February 12, Central Bank of West African States.
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