Historical Sketch

The British navigator James Cook discovered the island for the Europeans in 1774, without establishing a claim. In 1853, France formally took possession of New Caledonia but initially used it mainly as penal colony. Things changed when rich nickel deposits were discovered in the mid-1860s. The colonial administration was extended, and the mining was mandated to a chartered company. After the Second World War, the colony was transformed into an overseas territory. The tensions between the indigenous Kanaks and the European settlers grew in the 1970s and turned into an overt rebellion in the mid-1980s. As a result, a 1998 accord established a special ("sui generis") status for New Caledonia within the French state and set the frame for a final settlement of the constitutional question within 20 years. In three consecutive referendums since 2018, the population has voted for remaining with France and against independence.

Monetary History Overview

In 1872, the New Caledonia Company obtained a charter for the administration and exploitation of the islands which included the authority to issue paper money. This began already in the following year by the Company's Bank of New Caledonia which, however, defaulted within two years, whereas its banknotes were declared invalid without compensation. After a 10-years interim without banking presence, in 1888, the principal French colonial bank, Bank of Indochina, opened a branch in New Caledonia and took over paper money issuance. The New Caledonian Franc was at par with the French Franc, its convertibility into metropolitan currency was limited, however. During the German occupation of mainland France, the Pacific colonies were loyal to the French government-in-exile. Their monetary system decoupled from the French one, and after a monetary agreement with Great Britain in March 1941, the New Caledonian Franc was pegged to the British Pound. After the Second World War, France reorganised the monetary system of its colonies. The Pacific territories of French Polynesia, New Caledonia and Wallis & Futuna took on the French Pacific CFP Franc as a common currency.

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