CFA franc
Two common currencies of 14 African countries / From Wikipedia, the free encyclopedia
Dear Wikiwand AI, let's keep it short by simply answering these key questions:
Can you list the top facts and stats about CFA francs?
Summarize this article for a 10 year old
The CFA franc (French: franc CFA, [fʁɑ̃ seɛfɑ]), or Franc of the Financial Community of Africa (French: franc de la Communauté financière africaine; originally the Franc of the French Colonies in Africa, French: franc des Colonies françaises d'Afrique; colloquially franc; abbreviation: F.CFA), is the name of two currencies, the West African CFA franc, used in eight West African countries, and the Central African CFA franc, used in six Central African countries.[1] Although separate, the two CFA franc currencies have always been at parity and are effectively interchangeable. The ISO currency codes are XAF for the Central African CFA franc and XOF for the West African CFA franc.
Both CFA francs have a fixed exchange rate (peg) to the euro: €1 = F.CFA 655.957 exactly, and member countries deposited half of their foreign exchange reserves with the French Treasury.[2] The currency has been criticized for restricting the sovereignty of the African member states, effectively putting their monetary policy in the hands of the European Central Bank. Others argue that the CFA "helps stabilize the national currencies of Franc Zone member-countries and greatly facilitates the flow of exports and imports between France and the member-countries".[3]
On 22 December 2019, it was announced that the West African currency would be reformed and replaced by an independent currency to be called Eco.[4] In May 2020, the French National Assembly agreed to end the French engagement in the West African CFA franc, including the foreign reserve deposit requirements, thereby facilitating the transition to the Eco.[5] Despite initial plans for a monetary union by late 2020, setbacks including the COVID-19 pandemic, global geopolitical uncertainties, and failure to meet criteria resulted in a postponement until 2027.[6][7][8][9]