French government passes bill to end CFA franc
CFA francs. Getty Images / Bloomberg / Contributor
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The French government adopted the bill confirming the end of the CFA franc on Wednesday in the Council of Ministers. This bill stems from the agreement concluded at the end of December by Paris and the states of the West African Monetary Union. It acts the transformation of the CFA franc, which will become the Eco by maintaining the fixed parity with the Euro as well as the end of the centralization of African foreign exchange reserves with the French Treasury.
He was born by decree on December 25, 1945, he died, at least symbolically, by a law on May 20, 2020. The West African CFA Franc will eventually be replaced by Eco, the currency common to the countries of the ECOWAS. But it is not yet known when exactly.
The text confirms the cooperation agreement signed on December 21 in Abidjan by French President Emmanuel Macron and the governments of the states of WAMU, the West African Monetary Union. " This symbolic end was to be part of a renewal of the relationship between France and Africa and write a new page in our history, " said French government spokeswoman Sibeth Ndiaye. France is withdrawing its representatives from monetary governance bodies such as the BCEAO and no longer requires the deposit of half of the BCEAO's foreign reserves in Paris.
Sibeth Ndiaye, government spokesperson
Currency always pegged to the Euro
Last February, Nigeria notably asked for a postponement of the launch of the Eco. In the meantime, the currency in circulation in the WAEMU space does not change in principle. It remains pegged to the Euro. What changes is the role of Paris.
In the West African monetary authorities, notably the BCEAO, France no longer has representatives, and will only be informed of the decisions taken by the States of the WAMU. Because Paris continues to guarantee the West African currency, which it presents as an all-risk insurance in the event of a serious monetary crisis.
A point which reassures the business community but which annoys the partisans of a total rutpure and a complete monetary emancipation. The end of a symbol does not mean the end of the special relationship that Paris wishes to preserve with its African partners.
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