CFA ‘stability’ masks currency fluctuation against dollar and pound

Evidence

The much vaunted ‘stability’ does not take into account, for example, the fact that the CFA franc fluctuates against the dollar and the British pound, the currencies in which the prices of most of the exports of the zone’s states, and sometimes even their foreign debts, are denominated. This fluctuation affects their export earnings and the value of their foreign debt. Furthermore, ‘monetary stability’ does not preclude instability in terms of economic growth and employment. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 133

Categorization

• XREF: Directly rebuts the official French narrative of CFA stability introduced in the same chapter. — connects to: Devaluation and revaluation simply shift the fixed CFA-euro parity — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 122; Fixed exchange rates trade employment stability for external balance — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 295; CFA franc value is set politically, insulated from market economic conditions — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 97

Related

• Devaluation and revaluation simply shift the fixed CFA-euro parity (similarity 0.87)
• CFA franc parity changed only once since 1948 (similarity 0.87)
• CFA franc parity was frozen at 50 per French franc from 1958 to 1994 (similarity 0.87)
• The CFA franc’s parity was set without regard for local economic realities (similarity 0.86)
• Fixed and floating exchange rates operate by opposite logics (similarity 0.85)
• CFA franc value is set politically, insulated from market economic conditions (similarity 0.85)
• Fixed exchange rates trade employment stability for external balance (similarity 0.85)
• Euro appreciation deteriorates franc zone trade balances (similarity 0.84)
• The devaluation doubled France’s financial capacity in CFA francs overnight. (similarity 0.84)
• The CFA franc was deliberately overvalued against the metropolitan franc. (similarity 0.84)
• The CFA franc’s fixed peg forced colonies to absorb French devaluations helplessly (similarity 0.84)
• Fixed exchange rates force austerity when competitiveness declines (similarity 0.83)
• The same strong euro that hurts France devastates African export competitiveness (similarity 0.83)
• France’s own anti-inflation policies against the mark caused the CFA overvaluation that forced crisis. (similarity 0.83)
• An overvalued CFA franc penalised African exports while favouring imports from France (similarity 0.83)

Broader Connections

• CFA franc value is set politically, insulated from market economic conditions #expands (0.60) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 97
• Fixed exchange rates trade employment stability for external balance #complicates (0.50) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 295