Historical Sketch

In the late 1840s, France began occupying territories on the Guinea coast. Initially, they were administered out of the Senegal colony as "Southern Rivers Settlements", then reconstituted as separate colony and finally renamed to French Guinea in 1893. The colony was transformed into an overseas territory in 1946, and in preparation for the French Union it got constituted as autonomous republic in 1958. But in the same year, the population of Guinea rejected internal autonomy, which led to the subsequent failure of the entire French Union. As a consequence, Guinea attained independence within a week.

Monetary History Overview

After one and a half years of independence, Guinea also left the French dominated West African Monetary Union. In March 1960, the new central bank began operations, and the 1st Guinean Franc was introduced as national currency, at par with the West African CFA Franc but nominally pegged to US Dollar. In 1963, an exchange of banknotes was carried out at short notice and only within borders (officially for quality reasons) to eliminate cash holdings abroad. In October 1972, a currency reform took place, and the Guinean Syli got introduced with one zero less. The reason was more political than economic as the name "Franc" had a colonial connotation and "syli" (meaning elephant in the Susu language) was a reverence to the president and the ruling party. The monetary policy did not change, neither did the artificially high Dollar peg. In 1981, cash holdings were partially confiscated once more in a short-term exchange of banknotes. The political change of 1984 following the death of the long-time president also triggered a slow liberalisation of the economy. In early January 1986, the Syli was abolished, and the 2nd Guinean Franc was introduced at par. The new currency was devalued by more than 90%, another 55% devaluation was decreed in 1991 when also the peg switched from the US Dollar to the IMF Special Drawing Rights (SDR) unit. After two more devaluations, the Franc got floated in 1994. Its value has been continually decreasing ever since, reaching 10% of the initial rate around the mid-2010s.

Guinea joined the International Monetary Fund (IMF) on 28.09.1963.

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