CFP franc Totally Explained

Everything about the Cfp Franc totally explained

The CFP franc (called the franc in everyday use) is the currency used in the French overseas possessions of French Polynesia, New Caledonia and Wallis and Futuna. The initials CFP originally stood for Colonies françaises du Pacifique ("French colonies of the Pacific") but now officially stand for Change Franc Pacifique ("Pacific Franc Exchange"). The ISO 4217 currency code is XPF.

History

The CFP franc was created in December 1945, at the same time as the CFA franc. When France ratified the Bretton Woods Agreement in December 1945, the French franc was devalued from 200 francs = 1 British pound to 480 francs = 1 pound. 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 CFP franc wasn't devalued at all relative to the pound and U.S. dollar, leading to an initial exchange rate of 2.4French francs = 1 CFP franc. In January and October 1948 and again in April 1949, the French franc was devalued and new exchange rates to the CFP franc were adopted to hold the latter's value fixed. In September 1949, the pound was devalued relative to the dollar and the CFP franc's peg to the pound was abandoned in favour of a rate of 5.5 French francs = 1 CFP franc. The exchange rates between the French and CFP francs were:

Date introduced	alue of CFP franc in French francs
December 26, 1945	2.4
January 26, 1948	4.32
October 18, 1948	5.31
April 27, 1949	5.485
September 20, 1949	5.5

In 1960, the new franc (worth 100 old francs) was introduced in France and the exchange rate to the CFP franc consequently became 0.055 French francs = 1 CFP franc. The CFP franc has been issued by the Institut d'émission d'outre-mer (I.E.O.M., "Overseas Issuing Institute") since 1967. The I.E.O.M. has its headquarters in Paris.
   The currency was initially issued in three distinct forms for French Polynesia, New Caledonia and the New Hebrides, see French Polynesian franc, New Caledonian franc and New Hebrides franc. Wallis and Futuna use the New Caledonian franc. Although the banknotes of the New Hebrides bore the name of the territory, the notes of French Polynesia and New Caledonia could only be distinguished by the name of the capitals (Papeete and Nouméa, respectively) on the reverse of the notes.
   In 1969, the New Hebrides franc was separated from the CFP franc and has been subsequently replaced by the Vanuatu vatu in 1982.
   Since January 1, 1999, the CFP has had a fixed exchange rate to the euro of 1000 CFP francs = 8.38 euros. This change involved a very slight devaluation to round the value of 1000 CFP francs down to a whole number of euro cent.
   1000 CFP francs = 55 French francs = € 55 / 6.55957 ~ € 8.38384696

Coins

In 1949, New Caledonia and what was then called French Oceania (now French Polynesia) began to issue coins. The coins have been separated in two types: the obverses are identical, whilst the reverses are distinct. Both types 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.
The New Hebrides franc had a different history of coin issuance before being replaced by the Vanuatu vatu in 1982.

Banknotes

The IEOM began issuing banknotes in New Hebrides in 1965, and in New Caledonia and French Polynesia in 1969. In 1985, a new banknote, the 10,000 francs, was introduced which didn't bear any distinguishing mark and was common to both French Polynesia and New Caledonia. These were followed, between 1992 and 1996, by 500, 1000 and 5000 franc notes for all of the French Pacific Territories.
The overall design hasn't changed since 1969. One side shows landscapes or historical figures of New Caledonia, while the other side of the banknotes shows landscapes or historical figures of French Polynesia.

Tārā

Before the French regulated the currency on Tahiti, French Polynesia, traders often used the Chilean peso, known in English as a dollar. The word "dollar" became tārā (often written without accents as tara), and this term is still used among native Tahitian and local Chinese traders as an unofficial unit, worth 5 francs. Thus for a price of 200 francs, one would say tārā e maha-ahuru (40 tārā) in Tahitian.

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