Comorian franc

Comorian franc

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The franc (ISO 4217
ISO 4217
ISO 4217 is a standard published by the International Standards Organization, which delineates currency designators, country codes , and references to minor units in three tables:* Table A.1 – Current currency & funds code list...

 currency code KMF) is the official currency
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...

 of Comoros
Comoros
The Comoros , officially the Union of the Comoros is an archipelago island nation in the Indian Ocean, located off the eastern coast of Africa, on the northern end of the Mozambique Channel, between northeastern Mozambique and northwestern Madagascar...

. It is nominally subdivided into 100 centimes, although no centime denominations have ever been issued.

History


The French franc
French franc
The franc was a currency of France. Along with the Spanish peseta, it was also a de facto currency used in Andorra . Between 1360 and 1641, it was the name of coins worth 1 livre tournois and it remained in common parlance as a term for this amount of money...

 became the currency of Comoros after the islands became a French protectorate in 1886. In 1891, Sultan Said Ali of Bambao, Ngazidja issued coins denominated in centimes and francs which circulated alongside French currency. In 1912, the Comoros became a province of Madagascar
Madagascar
The Republic of Madagascar is an island country located in the Indian Ocean off the southeastern coast of Africa...

, which was a French possession
French colonial empires
The French colonial empire was the set of territories outside Europe that were under French rule primarily from the 17th century to the late 1960s. In the 19th and 20th centuries, the colonial empire of France was the second-largest in the world behind the British Empire. The French colonial empire...

. French banknotes and coins circulated in the colony. Apart from an emergency issue of small change notes in 1920, the French currency circulated alone until 1925.

On 1 July 1925, the French government formed an agreement with the Banque de Paris et des Pays-Bas to create the Banque de Madagascar, headquartered in Paris, and granted it a private monopoly
Government-granted monopoly
In economics, a government-granted monopoly is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service; potential competitors are excluded from the market by law, regulation, or other mechanisms of...

 to issue currency
Monetary authority
Monetary authority is a generic term in finance and economics for the entity which controls the money supply of a given currency, and has the right to set interest rates, and other parameters which control the cost and availability of money...

 for the colony of Madagascar. The Malagasy franc
Malagasy franc
The franc was the currency of Madagascar until January 1, 2005. It was subdivided into 100 centimes.-History:The first francs to circulate in Madagascar were French francs...

 (French: franc malgache) was equivalent to the French franc and French coins continued to circulate as Madagascar had no coins of its own until 1943.

When the Comoros became a separate French territory in 1945, the name of the issuing bank was changed to the Banque de Madagascar et des Comores (still headquartered in Paris). A branch office opened in Comoros in 1953. While the banknotes were changed to reflect the new status of Comoros, the coins were not changed and bore only the name Madagascar. On 26 December 1945, the Madagascar-Comores CFA franc
CFA franc
The CFA franc is the name of two currencies used in Africa which are guaranteed by the French treasury. The two CFA franc currencies are the West African CFA franc and the Central African CFA franc...

 was established and its value was fixed at 1.7 French franc
French franc
The franc was a currency of France. Along with the Spanish peseta, it was also a de facto currency used in Andorra . Between 1360 and 1641, it was the name of coins worth 1 livre tournois and it remained in common parlance as a term for this amount of money...

s. Old Madagascar coins and banknotes continued to circulate as this new currency. On 17 October 1948, the CFA franc was revalued to 2 French francs.

In 1950, the French government took over majority ownership of the Banque de Madagascar et des Comores. On 1 January 1960, the French franc was revalued, with 100 old francs becoming 1 new franc. (Décret n°59-1450 du 22 décembre 1959) The new exchange rate was 1 Madagascar-Comores CFA franc = 0.02 French francs (50 Madagascar-Comores CFA francs = 1 French franc).

On 26 June 1960, Madagascar gained independence from France, and the Institut d'Émission Malgache (headquartered in Antananarivo
Antananarivo
Antananarivo , formerly Tananarive , is the capital and largest city in Madagascar. It is also known by its French colonial shorthand form Tana....

) was created to issue currency only for Madagascar. Madagascar left the CFA zone effective 1 July 1973.

On 23 November 1979, the government of Comoros signed the Accord de coopération monétaire entre la République Française et la République fédérale islamique des Comores, a monetary cooperation agreement with France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...

, making Comoros part of the franc zone (but not part of the CFA franc
CFA franc
The CFA franc is the name of two currencies used in Africa which are guaranteed by the French treasury. The two CFA franc currencies are the West African CFA franc and the Central African CFA franc...

 zone). This agreement provided for the establishment of a system of fixed parity
Fixed exchange rate
A fixed exchange rate, sometimes called a pegged exchange rate, is a type of exchange rate regime wherein a currency's value is matched to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold.A fixed exchange rate is usually used to...

 between the French franc
French franc
The franc was a currency of France. Along with the Spanish peseta, it was also a de facto currency used in Andorra . Between 1360 and 1641, it was the name of coins worth 1 livre tournois and it remained in common parlance as a term for this amount of money...

 and the Comorian franc and free convertibility
Convertibility
Convertibility is the quality that allows money or other financial instruments to be converted into other liquid stores of value. Convertibility is an important factor in international trade, where instruments valued in different currencies must be exchanged....

 between the two currencies, guaranteed by the Comorian central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...

's opening of an operations account (compte d'operation) at the French Treasury (Trésor public
Trésor public
The Trésor public is the national administration of the Treasury in France. It is headed by the general direction of public accountancy in the Ministry of the Economy, Finance and Industry....

) to handle all exchange transactions. Sixty-five percent of the foreign exchange reserves
Foreign exchange reserves
Foreign-exchange reserves in a strict sense are 'only' the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, Special Drawing Rights and International Monetary Fund reserve positions...

 of Comoros are held in euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...

s in this account. This account is similar to overnight deposits with the French Treasury: it may bear interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....

 and may, in special circumstances, post a negative balance. However, to prevent this account from showing a lasting overdraft, a number of preventative measures have been set up.

The stability of the Comorian franc is founded on tight monetary and credit discipline, underpinned by two specific safeguard measures: the central bank is required to maintain 20% foreign-exchange cover of its sight liabilities, and the government is not allowed to draw more than 20% of the previous year's budget receipts from their central bank funds. The ministers of finance
Finance minister
The finance minister is a cabinet position in a government.A minister of finance has many different jobs in a government. He or she helps form the government budget, stimulate the economy, and control finances...

 of the franc area (France, the CFA zone and Comoros) meet biannually. The agreement between France and the Comoros is essentially the same as the agreement France has with the CFA Zone. It is a continuation of a relationship of monetary cooperation between the two countries that has existed for more than a century.

Until 1994, the Comorian franc was pegged to the French franc
French franc
The franc was a currency of France. Along with the Spanish peseta, it was also a de facto currency used in Andorra . Between 1360 and 1641, it was the name of coins worth 1 livre tournois and it remained in common parlance as a term for this amount of money...

 at the rate of 50 Comorian francs to 1 French franc. This was changed on January 12, 1994, when the currency was devalued
Devaluation
Devaluation is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged....

 in concert with the CFA franc
CFA franc
The CFA franc is the name of two currencies used in Africa which are guaranteed by the French treasury. The two CFA franc currencies are the West African CFA franc and the Central African CFA franc...

 devaluation. however, the Comorian franc was devalued 33⅓% to a new rate of 75 Comorian francs for 1 French franc, while the CFA franc's new rate was 100 CFA francs to 1 French franc. With the creation of the euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...

 in January 1999, the Comorian franc was pegged, at its prevailing rate, to the new currency. The exchange rate
Exchange rate
In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...

 is now 491.96775 Comorian francs to 1 euro.

European Monetary Union


In 1998 in anticipation of European Monetary Union
Economic and Monetary Union of the European Union
The Economic and Monetary Union is an umbrella term for the group of policies aimed at converging the economies of members of the European Union in three stages so as to allow them to adopt a single currency, the euro. As such, it is largely synonymous with the eurozone.All member states of the...

, the Council of the European Union
Council of the European Union
The Council of the European Union is the institution in the legislature of the European Union representing the executives of member states, the other legislative body being the European Parliament. The Council is composed of twenty-seven national ministers...

 addressed the monetary agreements France has with the CFA Zone and Comoros and ruled that:
  • the agreements are unlikely to have any material effect on the monetary
    Monetary policy
    Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...

     and exchange rate policy
    Exchange rate regime
    The exchange-rate regime is the way a country manages its currency in relation to other currencies and the foreign exchange market. It is closely related to monetary policy and the two are generally dependent on many of the same factors....

     of the Euro zone
  • in their present forms and states of implementation, the agreements are unlikely to present any obstacle to a smooth functioning of economic and monetary union
  • nothing in the agreements can be construed as implying an obligation for the European Central Bank
    European Central Bank
    The European Central Bank is the institution of the European Union that administers the monetary policy of the 17 EU Eurozone member states. It is thus one of the world's most important central banks. The bank was established by the Treaty of Amsterdam in 1998, and is headquartered in Frankfurt,...

     (ECB) or any national central bank
    Central bank
    A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...

     to support the convertibility of the CFA and Comorian francs
  • modifications to the existing agreements will not lead to any obligations for the European Central or any national central bank
  • the French Treasury will guarantee the free convertibility at a fixed parity between the euro
    Euro
    The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...

     and the CFA and Comorian francs
  • the competent French authorities shall keep the European Commission
    European Commission
    The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....

    , the European Central Bank and the Economic and Financial Committee informed about the implementation of the agreements and inform the Committee prior to changes of the parity between the euro and the CFA and Comorian francs
  • any change to the nature or scope of the agreements would require Council approval on the basis of a Commission recommendation and ECB consultation

Central Bank


The statutes of the Central Bank of the Comoros (Banque Centrale des Comores / البنك المركزي القمري Al-Bank al-Markazi al-Qomori) state that its Board of Directors shall have eight members who are chosen from the Comorian Government, the French Central Bank (Banque de France
Banque de France
The Banque de France is the central bank of France; it is linked to the European Central Bank . Its main charge is to implement the interest rate policy of the European System of Central Banks...

) and the French government
Government of France
The government of the French Republic is a semi-presidential system determined by the French Constitution of the fifth Republic. The nation declares itself to be an "indivisible, secular, democratic, and social Republic"...

. The post of Deputy Director of the Central Bank of the Comoros is held by a Banque de France official, who is responsible for monetary policy
Monetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...

. Since 19 November 1999, all the central bank's official rates have been pegged to the Euro Overnight Index Average (EONIA
Eonia
Eonia is an effective overnight interest rate computed as a weighted average of all overnight unsecured lending transactions in the interbank market. It has been initiated within the euro area by the contributing panel banks.It is one of the two benchmarks for the money and capital markets in the...

) leading to a stabilisation of interest rate
Interest rate
An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for...

 differentials with the euro. The BCC applies a compulsory reserves system
Reserve requirement
The reserve requirement is a central bank regulation that sets the minimum reserves each commercial bank must hold of customer deposits and notes...

 (30% of deposits) and a bank monitoring system. The headquarters are located in Moroni
Moroni, Comoros
-References:...

, and the current bank governor is Mer Said Ahmed Said Ali.

Coins


In 1890, Sultan Said Ali of Bambao, Ngazidja issued bronze 5 and 10 centimes and silver 5 francs. The coins were struck in Paris to the same specifications as the corresponding French coins. The three coins ceased to be valid in theory in 1912 but the lower two denominations were still turning up in general circulation as late as 1930. The two bronze coins are frequently used for magico-religious purposes. All three coins bore similar inscriptions, including the date 1308 AH
Islamic calendar
The Hijri calendar , also known as the Muslim calendar or Islamic calendar , is a lunar calendar consisting of 12 lunar months in a year of 354 or 355 days. It is used to date events in many Muslim countries , and used by Muslims everywhere to determine the proper day on which to celebrate Islamic...

, which corresponds to the Gregorian calendar
Gregorian calendar
The Gregorian calendar, also known as the Western calendar, or Christian calendar, is the internationally accepted civil calendar. It was introduced by Pope Gregory XIII, after whom the calendar was named, by a decree signed on 24 February 1582, a papal bull known by its opening words Inter...

 years 1890/91 AD
Anno Domini
and Before Christ are designations used to label or number years used with the Julian and Gregorian calendars....

.

In the 1920s, a shortage of coins led to the issuance of private tokens by the principal colonial company on Ngazidja and a sugar plantation on Mayotte
Mayotte
Mayotte is an overseas department and region of France consisting of a main island, Grande-Terre , a smaller island, Petite-Terre , and several islets around these two. The archipelago is located in the northern Mozambique Channel in the Indian Ocean, namely between northwestern Madagascar and...

. Denominations included 25 and 50 centimes and 1 and 2 francs. Aluminium and bronze were used in these tokens.

In 1964, coins were introduced specifically for use in the Comoros, replacing the Madagascar coins previously in use. Aluminium 1, 2, and 5 franc and aluminium-bronze 10 and 20 franc coins were issued. In 1975, nickel 50 francs were introduced, followed by nickel 100 francs in 1977 and nickel 25 francs in 1981. Nickel-plated-steel replaced nickel after 1990. The Institut d'Émission des Comores issued coins between 1975 and 1977, whilst the Central Bank has issued coins since 1981.

Until 1975, only French
French language
French is a Romance language spoken as a first language in France, the Romandy region in Switzerland, Wallonia and Brussels in Belgium, Monaco, the regions of Quebec and Acadia in Canada, and by various communities elsewhere. Second-language speakers of French are distributed throughout many parts...

 appeared on Comorian coins. Since then, Comorian
Comorian language
Comorian is the most widely used language on the Comoros and Mayotte. It is a set of Swahili dialects but with a much stronger Arabic influence than standard Swahili...

 has also been used.
Coins of the Comorian franc
ObverseReverseDenominationWeightDiameterComposition
1 franc aluminium
Aluminium
Aluminium or aluminum is a silvery white member of the boron group of chemical elements. It has the symbol Al, and its atomic number is 13. It is not soluble in water under normal circumstances....

23 mm
align=center |2 francs aluminium 27 mm 2.2 g
5 francs aluminium 31 mm 3.75 g
align=center |align=center |10 francs aluminium bronze
Aluminium bronze
Aluminium bronze is a type of bronze in which aluminium is the main alloying metal added to copper, in contrast to standard bronze or brass...

22 mm
align=center |25 francs nickel
Nickel
Nickel is a chemical element with the chemical symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge. Nickel belongs to the transition metals and is hard and ductile...

20 mm 3.9 g
align=center |align=center |50 francs nickel 24 mm 6 g
align=center |align=center |100 francs nickel-plated steel 28 mm 10 g

Comorian coin
Coin
A coin is a piece of hard material that is standardized in weight, is produced in large quantities in order to facilitate trade, and primarily can be used as a legal tender token for commerce in the designated country, region, or territory....

s have always been minted by the Monnaie de Paris
Monnaie de Paris
The Monnaie de Paris or, more administratively speaking, the "Direction of Coins and Medals", is an administration of the French government charged with issuing coins as well as producing medals and other similar items. Many ancient coins are housed there...

. This is indicated by the cornucopia
Cornucopia
The cornucopia or horn of plenty is a symbol of abundance and nourishment, commonly a large horn-shaped container overflowing with produce, flowers, nuts, other edibles, or wealth in some form...

 mint mark
Mint mark
A mint mark is an inscription on a coin indicating the mint where the coin was produced.-History:Mint marks were first developed to locate a problem. If a coin was underweight, or overweight, the mint mark would immediately tell where the coin was minted, and the problem could be located and fixed...

 on the coins, visible to the left of the date. The coins are manufactured at their facility in Pessac
Pessac
Pessac is a commune in the Gironde department in Aquitaine in southwestern France.It is the second-largest suburb of the city of Bordeaux and is adjacent to it on the southwest. It is a member of the metropolitan Urban Community of Bordeaux...

, Gironde
Gironde
For the Revolutionary party, see Girondists.Gironde is a common name for the Gironde estuary, where the mouths of the Garonne and Dordogne rivers merge, and for a department in the Aquitaine region situated in southwest France.-History:...

.

The 5-franc coin is nicknamed reali, referring to the Spanish real
Spanish real
The real was a unit of currency in Spain for several centuries after the mid-14th century, but changed in value relative to other units introduced...

; the 2-franc coin is nicknamed nusu, meaning "half", and the 1-franc coin "robo", meaning "quarter". The 1-, 2-, 5- and 10-franc coins are rarely used because of their low value. The 25- and 100-franc coins contain the phrase "Augmentons la production alimentaire" (Let's increase food production). The 5-franc coin contains the phrase "Conférence Mondiale sur les Pêches" (World Conference on Fishing). Both of these phrases are references to programs by the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...

 Food and Agriculture Organization
Food and Agriculture Organization
The Food and Agriculture Organization of the United Nations is a specialised agency of the United Nations that leads international efforts to defeat hunger. Serving both developed and developing countries, FAO acts as a neutral forum where all nations meet as equals to negotiate agreements and...

. Comoros is one of 114 countries that have issued FAO coins. More information on FAO coins can be found here.

Banknotes


The first Comorian paper money was issued in 1920. It consisted of an emergency issue of Madagascar postage stamps fixed to card to allow them to circulate as money. Denominations of 50 centimes and 1 franc were issued.
Loi ordinaire 62-873 du 31 juillet 1962, Article 12, allowed the Banque de Madagascar et des Comores to continue issuing notes in Comoros after Madagascar began issuing its own currency but, beginning 1 April 1962, they had "COMORES" overstamped on them. Denominations of 50, 100, 500, 1000 and 5000 francs were issued. As per Décret 64-1038 du 07 octobre 1964, banknotes without the overstamp ceased to be legal tender on 31 December 1964.


The overstamped notes circulated until 1976, when 500, 1000 and 5000 francs were introduced by the Institut d'Émission des Comores, the 50 and 100 franc notes being replaced by coins. The central Bank took over production of paper money in 1984. 2500 and 10,000 franc notes were introduced in 1997, followed by 2000 francs in 2005. The 2500 franc note is being withdrawn from circulation.

Comorian banknote
Banknote
A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...

s are manufactured by the Banque de France
Banque de France
The Banque de France is the central bank of France; it is linked to the European Central Bank . Its main charge is to implement the interest rate policy of the European System of Central Banks...

 at their paper mill
Paper mill
A paper mill is a factory devoted to making paper from vegetable fibres such as wood pulp, old rags and other ingredients using a Fourdrinier machine or other type of paper machine.- History :...

 in Vic-le-Comte and their printing works in Chamalières
Chamalières
Chamalières is a commune in the Puy-de-Dôme department in Auvergne in central France.Chamalières is the third-largest town in the department and lies about from Lyon.-History:...

, both in Puy-de-Dôme
Puy-de-Dôme
Puy-de-Dôme is a department in the centre of France named after the famous dormant volcano, the Puy-de-Dôme.Inhabitants were called Puydedomois until December 2005...

, Auvergne
Auvergne (région)
Auvergne is one of the 27 administrative regions of France. It comprises the 4 departments of Allier, Puy de Dome, Cantal and Haute Loire.The current administrative region of Auvergne is larger than the historical province of Auvergne, and includes provinces and areas that historically were not...

. The new 500, 1000, 2000, 5000, and 10,000 franc notes contain the EURion constellation
EURion constellation
The EURion constellation is a pattern of symbols found on a number of banknote designs worldwide since about 1996. It is added to help software detect the presence of a banknote in a digital image. Such software can then block the user from reproducing banknotes to prevent counterfeiting using...

.

See also



  • Malagasy franc
    Malagasy franc
    The franc was the currency of Madagascar until January 1, 2005. It was subdivided into 100 centimes.-History:The first francs to circulate in Madagascar were French francs...

  • CFA franc
    CFA franc
    The CFA franc is the name of two currencies used in Africa which are guaranteed by the French treasury. The two CFA franc currencies are the West African CFA franc and the Central African CFA franc...

  • CFP franc
    CFP franc
    The CFP franc is the currency used in the French overseas collectivities of French Polynesia, New Caledonia and Wallis and Futuna. The initials CFP originally stood for Colonies Françaises du Pacifique...

  • Currencies related to the euro

  • History of Comoros
    History of Comoros
    The history of Comoros goes back some 1500 years. It has been inhabited by various groups throughout this time. France colonised the islands in the 19th century. Comoros finally became independent in 1975.-Early inhabitants:...

  • Economy of Comoros
    Economy of Comoros
    Comoros is made up of three islands that have inadequate transportation links, a young and rapidly increasing population, and few natural resources. The low educational level of the labor force contributes to a subsistence level of economic activity, high unemployment, and a heavy dependence on...

  • Economy of Mayotte
    Economy of Mayotte
    The economic activity of Mayotte is based primarily on the agricultural sector, including fishing and livestock raising. The island is not self-sufficient and must import a large portion of its food requirements, mainly from Metropolitan France. The economy and future development of the island are...

  • Economy of Africa
    Economy of Africa
    The economy of Africa consists of the trade, industry, and resources of the people of Africa. , approximately 922 million people were living in 54 different countries. Africa is by far the world's poorest inhabited continent...



External links

Banque Centrale des Comores official site Text of the 1979 Comorian Agreement of Monetary Cooperation at Banque de France Decision of the Council of Europe on 23 November 1998 regarding the CFA and Comorian francs Franc zone information at Banque de France Franc zone information at Banque de France (in French, but more extensive than the English version) Central Bank of Madagascar