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Untitled Document
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France |
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The currency of France is the French franc (FF), which is divided into 100 Centimes. From 1971 to 1974, France maintained a two-tier exchange rate structure, composed of a fixed Commercial Franc Rate (for foreign trade transactions) and a freely fluctuating Financial Franc Rate (for all other remittances). In this period, the Commercial Franc Rate once joined the intro-European currency float. After that, the two rates were merged into a single, controlled, floating Effective Rate for the Franc, which rejoined the intra-European currency float in the following year. However, in 1976, France abandoned this float.
In 1979, France participated the ERM of EMS. In accordance with this agreement, France maintains the spot exchange rates between the franc and the currencies of the other participants within margins of a certain percentage above and below the cross rate derived from the central rates expressed in European Currency Units (ECUs). The agreements implied that the Bank of France (the Central Bank) stood ready to buy or sell the currencies of the other participating states in unlimited amount at specified intervention rates.
In January 1, 1999, France participated in a currency union (EMU) comprising 11 members of the EU. Internal conversion rates in respect to the national currencies of EMU participants were fixed to the euro, whereas the external exchange rate of the euro is market determined. The conversion rate between the euro and the French franc was set at FF 6.55957 per euro. The ECB (European Central Bank) has the right to intervene to smooth out fluctuations in external exchange rates. Fixed conversion rates in terms of the euro apply to the CFP franc, which is the currency of the overseas territories of France. There are two groups of African countries linked to the French Treasury through an Operations Account. The currency of France is the euro. In cash transactions, however, the legal tender had remained the French franc until 2002, when euro banknotes and coins were issued.
1. World Currency Yearbook. (WCY)
2. IMF Annual Report on Exchange Arrangement and Exchange Restriction. (IMF) |
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Date
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Changes
to the exchange rate regime
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French franc per U.S. dollar
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| 8 August 1969 | The French Franc (F), divided into 100 Centimes, was devalued. Its gold value was reduced 11.1% from 180 to 160 milligrams of fine fold, thus raising the Official Rate from 4.93706 to 5.55419 Francs. (WCY 1984, p.263) | 4.937-5.554 | | 8 August 1969 | The French Franc (F), divided into 100 Centimes, was devalued. Its gold value was reduced 11.1% from 180 to 160 milligrams of fine fold, thus raising the Official Rate from 4.93706 to 5.55419 Francs. (WCY 1984, p.263) | 4.937-5.554 | | 23 August 1971 | Following the floating of the U.S. Dollar, a two-tier exchange market was established, composed of a fixed Commercial Franc Rate for foreign trade transactions and a freely fluctuating Financial Franc Rate for all other remittances. (WCY 1985, p.295) | | | 18 December 1971 | With the de jure devaluation of the American dollar, the Official Rate was realigned to F5.1157 per U.S. Dollar, based on the unit's unchanged gold content, with a 4.5% fluctuation range between F5.0005 and F5.2310 per Greenback for the Commercial Franc Rate. (WCY 1985, p.295) | 5.001-5.231 | | 24 April 1972 | The Commercial Franc joined the other Common Market currencies in limiting their fluctuation range against one another to 2.25%. (WCY 1985, p.295) | | | 14 February 1973 | Following the American unit's devaluation, the Official Rate was religned to F4.604 per U.S. Dollar, as no change was made in the Franc's gold content. Fluctuation limits for for the Commercial Franc Rate were adjusted to F4.5005/4.70775 per Greenback. (WCY 1985, p.295) | 4.501-4.708 | | 19 March 1973 | The Commercial Franc Rate was set free to float against the American Dollar and, at the same time, was joined to a concerted float en bloc with the currencies of Belgium, Denmark, West Germany, Luxembourg, the Netherlands, Norway and Sweden. These units were linked by maintenance of a 2.25% fluctuation range against on another. (WCY 1985, p.295) | | | 19 January 1974 | The Commercial French Franc was withdrawn from the intra-European currency float and allowed to fluctuate freely against all currencies, thus effecting a de facto devaluation. (WCY 1985, p.295) | | | 21 March 1974 | The Commercial Franc Rate and the Financial Franc Rate were merged into a single, controlled, floating Effective Rate for the Franc, thereby generating another de facto devaluation. (WCY 1985, p.295) | | | 10 July 1975 | The Franc rejoined the intra-European currency float, and the intervention limits for the French unit were the same as those prevailing in January 1974. (WCY 1985, p.295) | | | 31 December 1975 | | 4.486 | | 15 March 1976 | The Franc again abandoned the "currency snake". (WCY 1985, p.295) | | | 31 December 1976 | | 4.970 | | 31 December 1977 | | 4.705 | | 31 December 1978 | | 4.180 | | 13 March 1979 | The European Monetary System (EMS), the successor to the European "currency snake" was activated, and included France as well as Belgium, Denmark, Ireland, Italy, Luxembourg, the Netherlands and West Germany. Currency fluctuation limits amont the member countries were set at 2.25% on either side of a fixed rate, except for Italy whose fluctuation margin was limited to 6%. Fixed rates and intervention limits were set and are periodically revised. (WCY 1985, p.295) | | | 31 December 1979 | | 4.020 | | 31 December 1980 | | 4.516 | | 21 May 1981 | The Franc was de facto devalued with the return of the Premium Dollar market, for the purchase of foreign securities by French residents. The premium for U.S. Dollars has risen to more than 30% and shrunk to less than 5% at various times. (WCY 1985, p.295) | | | 31 December 1982 | | 6.725 | | 31 December 1983 | | 8.348 | | 31 December 1984 | | 9.592 | | 31 December 1985 | | 7.561 | | 22 May 1986 | The Premium Dollar Market was abolished. (WCY 1986-1987, p.589) | | | 31 December 1986 | | 6.455 | | 31 December 1987 | | 5.340 | | 31 December 1988 | | 6.059 | | 19 June 1989 | Spain joined the Exchange Rate Mechanism of the EMS with a 6% fluctuation margin for the Peseta, which was included in the ECU basket on September 21st. (WCY 1990-1993, p.617) | | | 31 December 1989 | | 5.788 | | 8 January 1990 | The fluctuation margin for the Italian Lira was reduced to 2.25%. (WCY 1990-1993, p.617) | | | 8 October 1990 | The United Kingdom joined the Exchange Rate Mechanism of the EMS with a 6% fluctuation margin for the Pound Sterling. (WCY 1990-1993, p.617) | | | 31 December 1990 | | 5.129 | | 31 December 1991 | | 5.180 | | 6 April 1992 | Portugal joined the Exchange Rate Mechanism of the EMS with a 6% fluctuation margin for the Escudo. (WCY 1990-1993, p.617) | | | 16 September 1992 | The United Kingdom withdrew from the Exchange Rate Mechanism, followed by Italy a day later. (WCY 1990-1993, p.617) | | | 31 December 1992 | | 5.507 | | 2 August 1993 | The intervention threshold of the French franc in the ERM of the EMS was widened from 2.25 percent to 15 percent around the bilateral exchange rate. (IMF 1994, p.179) | | | 31 December 1993 | | 5.896 | | 31 December 1994 | | 5.335 | | 31 December 1995 | | 4.900 | | 1 January 1999 | The currency of France became the euro. The conversion rate between the euro and the French franc was set irrevocably at 6.55957 Frech Franc per euro. | |
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