Historical Sketch

When Portuguese navigators were the first Europeans to sight the Comoros in the early 16th century, sultanates had been established on each of the four islands. Islam had arrived through coastal trade from Oman already centuries before. In 1841, France took possession of Mayotte which at that time had become subordinate to neighboring Ndzuani (Anjouan). In 1886, Mayotte was annexed as a colony, and French protectorates were erected over the sultanates on the three other islands, Ndzuani, Mwali (Mohéli) and Ngazidja (Grande Comore). The latter island had just been unified with French help. Before that up to a dozen rivalling sultanates had co-existed. In 1912, the three sultans were deposed, and all four islands became part of the colony of Madagascar. In 1946, all French colonies were transformed into overseas territories. On this occasion, the Comoros were separated from Madagascar. In a referendum in December 1974, the inhabitants of three islands voted for independence, while Mayotte opted for integration into France.

Monetary History Overview

French accounting was introduced to the Comoros after the establishment of the colonial rule without local legislation. In the 1890s, the Sultanate of Ngazidja issued local subsidiary coins in French currency, together with a silver 5 Francs piece that was intended for presentation not circulation. French metropolitan money remained scarce. Subsidiary coins were issued by a colonial company or in the form of emergency stamp money by the local authorities. In 1926, the Bank of Madagascar began operations. In 1951, it was renamed Bank of Madagascar and the Comoros.

After the Second World War, France reorganised the monetary system of its colonies. In December 1945, colonial currencies were created for West Africa, Equatorial Africa and the Indian Ocean territories (Madagascar, Comoros, Reunion). They all were at par with each other, but only partly followed the 1945 devaluation of the French Franc and therefore appreciated against the metropolitan currency. In 1948, the three CFA Franc variants repegged to the Pound Sterling to decouple from further devaluations in France and repegged in November 1949, after the French Franc had stabilized. In 1960, Madagascar attained independence while the Comoros remained under French rule. The Bank of Madagascar and the Comoros remained acting currency institute for the Comoros after Madagascar had created its own institution and currency in 1963. The Comorian Franc was created as distinct currency, retaining the peg to the French Franc. In 1975, the Comoros attained independence. The state currency institute took over from the former colonial bank, otherwise currency did not change. The Bank of France still guaranteed the currency convertibility and effectively governed the monetary policy. In January 1994, France decided to devalue the three currencies under its oversight, while the West African and Central African CFA Franc were devalued 50% each, the Comorian Franc was down by only 33%. Since then, the peg has remained unchanged, translated into a peg to the Euro after 1999, the parity still guaranteed by the Bank of France.

The Comoros joined the International Monetary Fund (IMF) on 21.09.1976.

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