The CFA Franc and the Monetary Arrangements between France and Cote d’Ivoire: Economic stability tools or means of Domination?

CFA Franc;Franc zone;Monetary arrangements;Economic performance;convertibility;Fixed parity;Transferability.;307

Kacou N'douba Didier Simplice국제대학원 국제학과(국제지역학전공) ;

University:서울대학교 대학원

关键词: CFA Franc;    Franc zone;    Monetary arrangements;    Economic performance;    convertibility;    Fixed parity;    Transferability.;    307;   

Others  :  http://s-space.snu.ac.kr/bitstream/10371/161140/1/000000156321.pdf

美国|英语

来源: Seoul National University Open Repository

【 摘 要 】

This project examines the bilateral relations between France and Cote d;;Ivoire, focusing on the monetary and financial arrangements, and notably the costs and benefits of using the CFA Franc as national currency. The study found that the CFA franc ensures monetary stability and allows Cote d’Ivoire to control the inflation level,thanks to a tight regional monetary policy framework. Its fixed parity with French franc and later on with Euro prevents it from speculation in foreign exchange market. Moreover, it facilitates trade between Cote d’Ivoire and France, while preventing risk and uncertainty in transactions. However, some losses and disadvantages has been identified for Cote d’Ivoire’s economy. The study found that the operating mechanism of the CFA franc does not enable a good financing of the economy with internal resources. the principles of free convertibility and free transferability favors capital flight at the expense of the local economy. The CFA franc fixed parity with Euro has unfortunately an overvaluation effect on the exchange rate and tends to penalize the competitiveness of the Franc zone countries’ economy and considerable losses in export revenues. The study also found that the influence of France in the operationalization of the currency reflects the common feeling that Cote d’Ivoire is still under monetary domination and that the CFA franc’s functioning principles inhibit its development. Therefore, the study suggests a three-level-action approach. The first, at national level,is the adoption and the implementation of conjunctural and structural economic reforms to stimulateroduction, growth and job creation; the second consist in a concerted action at the sub-regional level (in WAEMU) for the purpose of reforming the operationalization system of the CFA Franc and adapting it to the economy of the member countries, including Côte d;;Ivoire; and finally, at the regional level, the realization of the project for the creation of the ECOWAS common currency. This last action should lead to thedisappearance of the CFA Franc, but its implementation requires an effective economic convergence among these countries.