Should stay the Mali in Zone franc area ?

Tidiani Sidibe

MPRA Paper from University Library of Munich, Germany

Abstract: The debate on the relevance of monetary cooperation agreements with France was back in the saddle by former Malian Prime Minister Moussa MARA July 23, 2015 during a radio broadcast; and Chadian President Idriss Deby Itno during the 55th anniversary of his country's 2015 Tuesday, August 11 The latter threw a big spanner in the franc zone, arguing that currency allows us to develop. Also, some harsh criticism, consider that the CFA franc, pegged to a strong euro hampers the competitiveness of our exports of raw materials quoted in dollars or pounds on the main financial centers in New York, London. This article shows the opposite, highlighting the arguments of stability and credibility enjoyed by the CFA franc. Indeed, the real effective exchange rate (REER) of the CFA franc jouie good parity level relative to trading partners, which means that the CFA franc is neither undervalued nor overestimates. Member countries become more competitive. The foreign reserves of the central banks (BCEAO and BEAC) represented the end of December 2014, only 4.9 months of imports. Monetary cooperation with France is not a zero sum game, it's a win-win partnership. Priority should be given to macroeconomic convergence.

Keywords: Zone franc; central bank; currency; monetary maturity; foreign exchange reserves; real effective exchange rate ( REER); exchange parity; unlimited convertibility guarantee; transaction accounts; devaluation; monetary policy; opportunity cost; common currency ECOWAS. (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Date: 2015-08-25
New Economics Papers: this item is included in nep-mac and nep-mon
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https://mpra.ub.uni-muenchen.de/66581/3/MPRA_paper_66581.pdf revised version (application/pdf)

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