The CFA Franc Zone: Currency Union and Monetary Standard

James Boughton

No 1991/133, IMF Working Papers from International Monetary Fund

Abstract: The CFA franc zone comprises a group of countries in central and west Africa whose currencies have been firmly linked to the French franc since 1948. It combines the features of a currency union with those of an exchange rate peg, and an analysis of its effectiveness must examine both dimensions. Viewed from the perspective of a currency union among the African countries, it would appear that the zone would not constitute an optimum currency area. But when France is viewed as an integral part of the system, the benefits—including discipline, credibility, and stability in international competitiveness—become clearer.

Keywords: WP; CFA franc zone; exchange rate; terms of trade; CFA franc country; single currency; monetary standard; currency arrangement; zone country; price flexibility; nominal exchange rate; CFA franc zone country; world coffee price; countries in the CFA franc zone; Monetary unions; Currencies; Inflation; Exchange rates; Price stabilization; West Africa; Central Africa; Europe; Africa (search for similar items in EconPapers)
Pages: 60
Date: 1991-12-01
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Citations: View citations in EconPapers (20)

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