CFA Franc

DEFINITION of 'CFA Franc'

One of two African regional currencies backed by the French treasury, and pegged to the euro. CFA franc can refer to two either the Central African CFA franc or the West African CFA franc. Although they are separate currencies, the two are effectively interchangeable as they have the same monetary value against other currencies. However, they could theoretically have different values if France decides it.


"CFA" has had a few meanings over the years. Between 1945 and 1958 CFA stood for "colonies françaises d'Afrique", referring to former African colonies of France. Between 1958 and the independence of the nations using the CFA in the early 1960s stood for "communauté françaises d'Afrique" (French Community of Africa). Finally after independence and to this day it stands for "Communauté financière d'Afrique" (African Financial Community).

BREAKING DOWN 'CFA Franc'

The CFA franc was created in 1945 following the end of the Second World War. Previously, French colonies had their currencies pegged to the French franc, but the Bretton Woods Agreement ratified in 1945 had the French franc pegged to the dollar, devaluing the French Franc. By creating a new currency, the CFA Franc, France was able to avoid devaluating currencies in its colonies.

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RELATED FAQS
  1. Which one of the following uses of the "CFA" trademark is correct ...

    The correct answer is e. The correct use the CFA abbreviation is one the most important things to know as a CFA candidate. ... Read Answer >>
  2. Which one of the following uses of the "CFA" trademark is correct ...

    The correct answer is e. This is one of the most important things to remember as a CFA candidate. Never ever use the CFA ... Read Answer >>
  3. Do I have to complete all exams within a certain period of time to receive the CFA ...

    According to the CFA Institute, a candidate can take as much time as necessary to complete all three levels of the CFA program.Therefore, ... Read Answer >>
  4. If I already hold a professional certification am I eligible for any exemptions from ...

    No. To obtain a CFA designation, you must complete all levels of the CFA program regardless of whether you hold a professional ... Read Answer >>
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    Understand what it means to hold the Chartered Financial Analyst designation. Learn how a candidate can work to become a ... Read Answer >>
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    The CFA Institute requires individuals to satisfy a number of steps to become CFA charterholders.The most widely known requirement ... Read Answer >>
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