The CFA Franc Zone and the EMU

Author/Editor:

Michel Galy ; Michael T. Hadjimichael

Publication Date:

November 1, 1997

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Whether the prospective shift of the peg of the CFA franc to the euro would constitute an exchange rate arrangement with EMU countries would depend critically on the interpretation of the free convertibility of the CFA franc guaranteed by France. Nonetheless, this shift is likely to leave the CFA franc arrangements and operating features of the zone essentially unchanged. The current parity of the CFA franc could be considered in line with fundamentals. The potential economic consequences for the CFA franc countries could be positive over the long term, but there is a risk of a weakening of external competitiveness.

Series:

Working Paper No. 97/156

Subject:

English

Publication Date:

November 1, 1997

ISBN/ISSN:

9781451857368/1018-5941

Stock No:

WPIEA1561997

Format:

Paper

Pages:

42

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