ABSTRACT
The Franc Zone operates on the basis of agreements concluded between France and each group of member countries, and the Comoros. The currencies in the Franc Zone were formerly linked with the French franc at a fixed rate of exchange. Following the introduction of the euro in January 1999, the Franc Zone currencies were effectively linked at fixed parity to the euro. Arrangements concluded between France and the Franc Zone remained in force that provided the Franc Zone currencies with unlimited convertibility into euros, at a fixed exchange rate, guaranteed by the French Treasury; central issuing banks were based in each group of member countries, and the Comoros—with overdraft facilities provided by the French Treasury, and monetary reserves held mainly in the form of euros. From 2020 France ceased participating in governance of the zone, and the BCEAO was no longer obliged to centralize its foreign exchange reserves with the French Treasury.
