CFP franc
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The CFP franc (in French: franc Pacifique or franc CFP ; CFP stood for Colonies françaises du Pacifique (i.e. "French colonies of the Pacific") and is now standing for Change franc Pacifique (i.e. "Pacific franc exchange"); ISO 4217 currency code: XPF) is a currency, called "franc" in everyday conversation, used in the French overseas "country" of French Polynesia, in the French sui generis collectivity of New Caledonia, and in the French overseas collectivity of Wallis and Futuna.
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1945-1949
It was created in December 1945, together with the CFA franc. The reason for the creation of these francs was the weakness of the French franc immediately after the Second World War. When France ratified the Bretton Woods Agreement in December 1945, the French franc was devalued in order to set a fixed exchange rate with the US dollar. New currencies were created in the French colonies to spare them the strong devaluation of December 1945. René Pleven, the French minister of finance, was quoted saying: "In a show of her generosity and selflessness, metropolitan France, wishing not to impose on her far-away daughters the consequences of her own poverty, is setting different exchange rates for their currency." The CFA franc and the other colonial currencies were set at a fixed exchange rate with the French franc, but the CFP franc, however, was set at a fixed exchange rate with the US dollar, which played a major role in the economy of the French Pacific territories since the Second World War. That situation ended in September 1949 when the CFP franc was given a fixed exchange rate with the French franc.
1949-1985
The CFP franc has been issued by the IEOM (Institut d'émission d'outre-mer, i.e. "Overseas Issuing Institute") since 1967. The IEOM has its headquarters in Paris.
Two slightly different sets of banknotes (bills) were issued: one set was used in French Polynesia while the other set was used in New Caledonia and Wallis and Futuna (and also in Vanuatu before its independence). They shared the same design, but French Polynesia banknotes had the overprint "Papeete", while the other banknotes had the overprint "Nouméa".
1985-present
The new highest denomination 10,000 CFP franc banknote (83.8 euro) issued in 1985 was the first one that was not overprinted with a city name. The 500 franc banknote issued in 1992, and the 1000 and 5000 franc banknotes issued in 1996 are also without the overprint. The designs of the 500, 1000, 5000 franc banknotes did not change.
Today, all banknotes are strictly identical from New Caledonia to French Polynesia. One side of the banknotes shows landscapes or historical figures of New Caledonia, while the other side of the banknotes shows landscapes or historical figures of French Polynesia.
The coins are still separated in two sets: one side of the coins is identical from New Caledonia to French Polynesia, while the other side of the coins is inscribed with the name "New Caledonia" in New Caledonia and in Wallis and Futuna, and with the name "French Polynesia" in French Polynesia. Both sets of coins can be used in all three French territories. The situation of the CFP coins is thus quite similar to that of the euro coins, which have a national side but can be used in all countries of the euro zone.
Historical exchange rate
- December 26, 1945 to September 20, 1949 - Fixed exchange with the US dollar at 1 USD = 49.6 XPF. Non-fixed exchange rate with the French franc, which devaluates 4 times vs. the US dollar. From 1 XPF = 2.40 FRF (FRF = French franc) in December 1945, the exchange rate reaches 1 XPF = 5.50 FRF in September 1949
- September 21, 1949 to December 31, 1959 - Fixed exchange rate with the French franc at 1 XPF = 5.50 FRF
- January 1, 1960 to December 31, 1998 - Fixed exchange rate with the French franc at 1 XPF = 0.055 FRF (January 1, 1960: 100 'old' francs became 1 'new' franc)
- January 1, 1999 onward - Fixed exchange rate with the euro at 1,000 XPF = 8.38 euro (January 1, 1999: euro replaced FRF at the rate of 6.55957 FRF for 1 euro)
The 1960 and 1999 events are merely changes in the currency in use in France: the relative value of the CFP franc (XPF) vs. the French franc / euro is unchanged since 1949.
