Historical Sketch

During the 19th century, France had extended its colonial empire throughout the Pacific ocean. Some island groups were merged into a common administrative unit called French Oceania, later Polynesia, while others remained separate like New Caledonia and New Hebrides, the latter being jointly colonized with Great Britain.

Monetary History Overview

After the Second World War, France decoupled the monetary system of its colonies from the mainland. In December 1945, a common currency area was created for the Pacific territories (New Caledonia, Polynesia and Wallis & Futuna). The French Pacific CFP Franc (wherein CFP originally stood for "French colonies in the Pacific", nowadays for "Financial Community of the Pacific") was pegged to the British Pound like the French Franc, but at a different rate. The CFP Franc did not follow the subsequent devaluation of the French Franc, therefore appreciated against the metropolitan currency. Only in November 1949, after the French Franc had stabilized, the CFP Franc repegged to the metropolitan currency. The Bank of Indochina renounced to the issuance privilege for the Pacific territories in mid-1947, but accepted to act as temporary currency until the constitution of a successor. In September 1948, the establishment of the Indochina Currency Instute was legislated. However, it never came into being and the interim period lasted for almost two decades. In 1967 finally, the French Overseas Currency Institute began operations and took over money issuance. The CFP Franc's had remained unchanged since 1949 until end 1998, when the Euro replaced the French currency. The fixed parity against the Euro continues since then as guaranteed by the Bank of France.

The CFP Franc is the currency of the three territories of French Polynesia, New Caledonia and Wallis & Futuna.

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Monetary History Sources