The Franc area is the monetary union between countries whose currencies were tied to the French franc.
It is made up of former colonies of the French Empire which, having achieved independence, chose to remain in a homogeneous whole characterised by a common exchange rate system.
It is organised in the Conference des Ministres des Finances des Pays de la Zone Franc based at the Banque de France, Service de la Zone Franc, in Paris.
The franc area consisted of:
a) by France, the Départements d'Outre-mer (Guiana, Guadeloupe, Martinique, Réunion) and the collectivités of Mayotte (Indian Ocean) and Saint-Pierre-et-Miquelon (in the Atlantic off the Canadian coast), where the legal currency was the French franc, issued by the Banque de France and, for the DOMs and collectivités, by the Institut d'émission des départements d'outre- mer-IEDOM;
b) from 14 African states (Benin, Burkina Faso, Côte-d'Ivoire, Guinea-Bissau, Mali, le Niger, Sénégal and Togo in West Africa; Cameroun, Central African Republic, Congo, Gabon, Guinea Équatoriale and Chad in Central Africa), where the legal currency was and is the franc CFA (acr. of Communautée financière africane; 1 FF = 100 F CFA);
c) from the Comores, where the legal tender is the franc comorien (1 FF. = 75 FC);
d) from the Pacific possessions (Nouvelle Calédonie, French Polynesia, Wallis-et-Futuna), where the legal currency is the CFP franc (Colonies Françaises du Pacifique), established by decree No. 45-0136 of 25.12.1945 (art. 3), with an exchange rate parity (1 FF = 18, 18182 F CFP; 1000 F CFP = 55 FF) fixed on 1.9.1949 (since then CFP = Change Franc Pacifique) and remained unchanged until today, except for the nominal effect of the introduction of the heavy franc.
The 14 African states are divided into two unions:
the Union Economique et Monétaire Ouest Africaine (UEMOA) comprising:
- Burkina Faso,
- Côte d'Ivoire,
- Guinea Bissau,
the Union Monétaire de l'Afrique Centrale (UMAC) including
- Equatorial Guinea,
- Central African Republic.
In theUEMOA issuing institution is the Banque Centrale des Etats de l'Afrique de l'Ouest (BCEAO)
in the UMAC is the Banque des Etats de l'Afrique Centrale (BEAC).
In the Pacific Territories, the issuing institution of the CFA franc is the Institut d'émission des territoires d'outre-mer-IEOM.
In the Comores, the issuance of paper currency of franc comorien is carried out by the Institut d'Emission des Comores, a currency board attached to the French Treasury, while the metal currency is issued by the Banque Centrale des Comores (BCC), a joint venture of the State of the Comores and the French Republic.
Effects after the introduction of the euro.
With the start of the third stage of EMU, from 1.1.1999 the French franc has been replaced as legal tender by the euro even in overseas departments and communities.
In the DOMs and collectivités, the tasks of issuing legal tender within the framework of the ESCB were taken over by the Banque de France (ordonnance n°2000-347 du 19 avril 2000).
IEDOM was retained as an institution under public law, but it issues currency on behalf of and under the control of the Banque de France; however, it continues to perform tasks on behalf of the state (e.g. coin circulation) and on behalf of third parties and also operates as an economic observatory.
For the currencies of the 14 African states and the Comores, the peg to the franc was replaced by a peg to the euro.
The parities are now 1 euro = 655, 957 CFA francs and 1 euro = 491, 96775 Comores francs, calculated on the basis of the French franc/euro exchange rate.
The previous monetary agreements remained in force, also recognised by the EC (Council Decision 98/683/EC of 23.11.1998).
For French Pacific possessions, the parity was set at 1000 F CFP = 8, 38 euro (1 euro = 119, 3317F CFP) by the Arrêté du 31.12.1998 du Ministre de l'économie, des finances et de l'industrie.