Colonial territories absorbed the costs of repeated French franc devaluations.

Evidence

The ‘overseas territories’ would thus pay the price of the instability of the metropolitan franc. On 26 January 1948, the latter was subject to a devaluation of 44 per cent. The CFA franc adjusted accordingly. On 17 October 1948, the metropolitan franc was devalued a second time, but at that point the French authorities decided to change the parity of the CFA franc: a CFA franc would now buy two metropolitan francs. When the ‘new franc’, termed ‘heavy franc’, was created on 27 December 1958, the parity of the CFA franc was maintained. Subsequently, between 1958 and 1986, the French currency would devalue four more times, each time with heavy repercussions for the territories that used the CFA franc. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 78

Categorization

• XREF: connects to: The CFA franc’s real purpose was draining colonial wealth to France.; The 1994 devaluation tripled French financial advantages while shifting blame to the IMF.; An overvalued CFA franc was engineered to reorient colonial trade toward France (+8 more)

Related

• The CFA franc’s fixed peg forced colonies to absorb French devaluations helplessly (similarity 0.92)
• The 1994 devaluation tripled French financial advantages while shifting blame to the IMF. (similarity 0.89)
• The CFA franc was deliberately overvalued against the metropolitan franc. (similarity 0.89)
• The 1994 devaluation capped decades of Paris refusing to adjust the overvalued CFA franc (similarity 0.88)
• France introduced the CFA franc to several African colonies in 1945 (similarity 0.88)
• Paris imposed a currency overvalued against the metropolitan franc without economic justification. (similarity 0.88)
• An overvalued CFA franc was engineered to reorient colonial trade toward France (similarity 0.88)
• The devaluation doubled France’s financial capacity in CFA francs overnight. (similarity 0.87)
• The CFA franc originated in 1945 as a Françafrique control tool. (similarity 0.86)
• CFA franc parity changed only once since 1948 (similarity 0.85)
• A strong CFA franc forced colonial trade to flow through metropole markets. (similarity 0.85)
• The CFA franc’s parity was set without regard for local economic realities (similarity 0.85)
• The cooperation agreements preserved the CFA franc across former colonies. (similarity 0.85)
• CFA franc parity was frozen at 50 per French franc from 1958 to 1994 (similarity 0.85)
• France’s own anti-inflation policies against the mark caused the CFA overvaluation that forced crisis. (similarity 0.85)

Broader Connections

• Producing CFA francs in France costs franc zone states over half a billion euros #expands (0.75) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 244
• Post-colonial monetary unions survived only in the franc zone and small dependencies #expands (0.55) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 350