The CFA Franc Zone and the EMU

November 1, 1997

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Michel Galy, and Michael T. Hadjimichael The CFA Franc Zone and the EMU, (USA: International Monetary Fund, 1997) accessed December 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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. The current parity of the CFA franc could be considered in line with fundamentals. The potential economic consequences for the CFA franc countries could be positive over the long term, but there is a risk of a weakening of external competitiveness.

Subject: Banking, Currencies, Economic integration, Exchange rates, External debt, Foreign exchange, Monetary unions, Money, Real effective exchange rates

Keywords: CFA franc, CFA franc country, CFA franc zone, Country, Currencies, EMU, EMU country, EU country, Euro, Exchange rates, Monetary Union, Monetary unions, Optimum Currency Areas, Real effective exchange rates, Sub-Saharan Africa, U.S. dollar, West Africa, West African CFA franc, WP, Zone arrangement

Publication Details

Pages:

42
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1997/156
Stock No:

WPIEA1561997
ISBN:

9781451857368
ISSN:

1018-5941

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