XOF (West African CFA Franc)
What Is the XOF (West African CFA Franc)?
The West African CFA franc (XOF) is the shared currency of eight independent states in West Africa. The XOF utilizes the two coins and banknotes, with the franc partitioned into 100 centimes. The Central Bank of West African States, situated in Dakar, Senegal, manages the currency. The individuals that utilization the West African CFA France comprise of the West African Economic and Monetary Union and incorporate Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal, and Togo. Together, these countries have a spending power that surpasses north of 78 billion dollars.
CFA represents Communatu\u00e9 financi\u00e8re d'Afrique or African Financial Community.
Grasping the West African CFA Franc
The CFA franc is one of two regional African currencies backed by the French treasury with fixing to the euro. 'CFA franc' can allude to either the Central African CFA franc, abbreviated XAF in currency markets, or the West African CFA franc, abbreviated XOF in currency markets. Despite the fact that they are separate currencies, the two are really interchangeable as they hold similar monetary value against different currencies. In theory, be that as it may, the French government or the monetary unions utilizing the currencies could choose to change the value of either.
Since the individuals are combined by their utilization of the CFA franc, they have made what is known as the CFA franc zone. The CFA franc zone is comprised of the two independent unions of the West African Economic and Monetary Union and the Central Africa Economic and Monetary Community. The dual union aided concrete the value and ease of use of the CFA franc, first by setting its equivalent to the French franc, which later turned into the euro. By adjusting the values, the provinces had the option to gain security and stability with the franc. In return, nonetheless, the French fortune required large deposits of their [external reserves](/unfamiliar exchange-reserves) into their accounts, first at 65-percent and afterward, let down to 50-percent.
History of the West African CFA Franc (XOF)
Alongside the Central African CFA franc (XAF), the West African CFA franc (XOF) makes up the currency for the greater part of central and west Africa. The currency was presented following the World War II and supplanted the French West African franc.
Several countries having a place with the West African Economic and Monetary Union (UEMOA) were French settlements utilizing the French West African franc, including the Ivory Coast, Dahomey, French Sudan, Mauritania, Niger, Senegal, Togo and Upper Volta. As those settlements gained independence, they kept on involving the CFA France for their currency.
Mali, otherwise called French Sudan, was the main independent settlement to make a national currency in 1961. In any case, by 1984, Mali returned to utilize the CFA franc, with an exchange of 1 CFA France to 2 Malian francs. The CFA stakes to the euro.
Creation of the CFA franc was in 1945, following the finish of the Second World War. Beforehand, French states had their currencies pegged to the French franc. Nonetheless, changes made by the signing of the Bretton Woods Agreement, endorsed in 1945, pegged the French franc to the dollar, which devalued the French Franc. France made the new currency to try not to devalue the money in its settlements.
The initial exchange rate in 1945 was 1 CFA franc to 1.70 French francs. In 1948, the rate changed to 1 CFA franc to 2 French francs after the devaluation of the French franc. This misleadingly high exchange rate for the CFA franc caused economic stagnation among the countries in the CFA franc zone during the 1980s and mid 1990s. In counsel with France and the International Monetary Fund, the African monetary unions chose to devalue their currencies by 50 percent, which, alongside other fiscal and monetary policy changes, generated GDP growth of 5 percent in the CFA franc zone somewhere in the range of 1995 and 2000.
At the point when France changed from the franc to the euro, the currencies retained parity, so the currencies presently trade at 100 CFA franc to 0.152449 euro.
- The West African CFA franc ought not be mistaken for the Central African CFA franc (XAF), shared by Central African nations.
- The West African CFA Franc (XOF) is the currency shared by eight West-African nations: Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal, and Togo.
- XOF was once pegged to the French franc,and when France changed to the euro, the currencies retained parity, where 100 CFA franc = 0.152449 euro