Comorian franc
The Comorian franc (ISO 4217 currency code KMF) is the official currency of the nation of Comoros.
In 1979, the government of Comoros signed a monetary cooperation agreement with France making the Comoros part of the franc zone (but not part of the CFA franc zone). This agreement provided for the establishment of a system of fixed parity between the French franc and the Comorian franc and free convertibility between the two currencies, guaranteed by the opening of an operations account by the Comorian central bank at the French Treasury (Trésor public) to handle all exchange transactions. The statutes of the Central Bank of the Comoros (Banque Centrale des Comores) state that its Board of Directors shall have eight members who are chosen from the Comorian Government, the French Central Bank (Banque de France) and the French government. 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.
European Monetary Union
In 1998 in anticipation of European Monetary Union, the Council of the European Union, in addressing the monetary agreement between France and the Comoros, ruled that:
- the agreement is unlikely to have any material effect on the monetary and exchange rate policy of the Euro zone
- in its present form and state of implementation, the agreement is unlikely to present any obstacle to a smooth functioning of economic and monetary union
- nothing in the agreement can be construed as implying an obligation for the European Central Bank or any national central bank to support the convertibility of the Comorian franc
- modifications to the existing agreement 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 and the Comorian franc
- the competent French authorities shall keep the European Commission, the European Central Bank and the Economic and Financial Committee informed about the implementation of the agreement and inform the Committee prior to changes of the parity between the euro and Comorian franc
- any change to the nature or scope of the agreement would require Council approval on the basis of a Commission recommendation and ECB consultation
Exchange rate history
From its creation in 1981, the Comorian franc was pegged to the French franc at the rate of 50 Comorian francs to 1 French franc. On January 12, 1994, the currency was devalued (in concert with the CFA franc devaluation); however, the Comorian franc was devalued at the lesser rate of 75 Comorian francs for 1 French franc. (The CFA franc's new rate was 100 CFA francs to 1 French franc.) With the creation of the Euro in January 1999, the Comorian franc has been fixed to the new currency at the same value. The exchange rate is now 491.9677 Comorian francs to 1 Euro.
See also
- Source: World Bank and European Central Bank