Three weeks ago, a rumour emerged that the CFA franc – two closely-related currencies used by 14 countries in western and central Africa – would be devalued by 35 per cent on January 1, 2012.
As a result, anxiety is taking hold of the 140 million citizens of francophone Africa. The devaluation could create a liquidity crisis and cause inflation rates to soar. Although the two governors of the central banks of Western and Central Africa have dismissed the rumour, the fact that French authorities and African heads of state failed to comment fuels peoples’ fears and could result in a massive financial outflow.
The eurozone crisis and France’s struggle to maintain its credit rating deepened fears that devaluing the CFA franc could be indirectly used as an instrument to safeguard the euro.
Read the full article by Julie Owono here.