Reserve centralization persists indirectly even after the operations account closes

Evidence

Despite the closure of the operations account, there is nothing a priori to prevent the BCEAO from using its foreign exchange reserves to buy French government debt securities. As we have seen, the BEAC, for example, has made a habit of investing the non-mandatory portion of its foreign exchange reserves in French Treasury debt securities. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 376 (#corroborates, via linked claim)

The reserves deposited in the operations accounts do not therefore represent savings that are ‘parked’ in France. The underlying mechanism of the system is relatively simple: if the Ivorian economy exports cocoa to France for a value of €400 million, this sum is credited to the operations account of the BCEAO; on the other hand, if the country imports €400 million worth of equipment from the euro area, the operations account is debited for the same amount. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 105 (#qualifies, via linked claim)

Categorization

• XREF: connects to: Closing the operations account may not end the centralisation of reserves — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 376; Reserve centralisation persists indirectly through purchases of French debt; Operations account balances reflect trade flows, not parked savings reserves — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 105

Related

• Closing the operations account may not end the centralisation of reserves (similarity 0.94)
• Operations account balances reflect trade flows, not parked savings reserves (similarity 0.94)
• Reserve centralisation persists indirectly through purchases of French debt (similarity 0.91)
• When franc zone accounts are in credit, the central banks finance the French Treasury (similarity 0.81)
• African central banks have periodically earned negative real returns on their French-held reserves (similarity 0.80)
• African countries lost 250 billion CFA francs by depositing reserves in operations accounts (similarity 0.80)
• The CFA system requires African central banks to deposit half their reserves with France. (similarity 0.79)
• African central banks must deposit half their reserves at the French Treasury (similarity 0.79)

Broader Connections

• Closing the operations account may not end the centralisation of reserves #corroborates (0.90) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 376
• Reserve centralisation persists indirectly through purchases of French debt #expands (0.85)
• Operations account balances reflect trade flows, not parked savings reserves #qualifies (0.60) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 105