WHAT IS XPF (CFP Franc)
XPF (CFP Franc) is the currency used by the four French overseas collectivities which include French Polynesia, New Caledonia, Wallis, and Futuna. Each franc can subdivide into centimes.
BREAKING DOWN XPF (CFP Franc)
Paris-based Institut d'émission d'Outre-Mer, headquartered in Paris, issues the CFP Franc (XPF). The CFP Franc is also known as the “franc Pacifique” due to its use in the Pacific Ocean region. Initially, the CFP franc had a fixed exchange rate with the US dollar, which played a significant role in the economies of the French Pacific territories’ after World War II. In 1949, the CFP franc changed to have a fixed exchange rate with the French franc. Currently, the CFP franc pegs to the Euro.
The CFP franc is a 72-year-old currency, one of two currencies which France introduced after the Second World War. The post-war issue was as a means to combat the weakness of the French franc (F). The other money issued at this time is the West African CFA Franc. The Central Bank of West African States located in Dakar, Senegal, now regulates the West African CFA franc, and the West African Economic and Monetary Union which includes Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Sénégal, and Togocurrency use the currency.
History and Background of the CFP Franc
After the economic turmoil of the Second World War, France, and other nations ratified the Bretton Woods Agreement in 1945. The Agreement forced the devaluation of many currencies including the French franc. The document also stipulated the pegging of the French franc to the US dollar (USD). To spare the French colonies from the impact of the massive devaluation, France created the two new currencies, the West African and the CFA Franc (XPF).
At first, there were three distinct forms of the currency for French Polynesia, New Caledonia, and the New Hebrides respectively, with Wallis and Futuna using the New Caledonian franc. Now all banknotes are identical, with one side exhibiting landscapes or historical figures of French Polynesia and the other side landscapes or historical figures of New Caledonia.
There are still two sets of coins, however. From New Caledonia to French Polynesia one side of the coins remains the same while the reverse side will vary. , appearing with either the name Nouvelle-Calédonie
In New Caledonia and Wallis and Futuna, the name the name Nouvelle-Calédonie appears. In French Polynesia, the name Polynésie Française appears. Similar to how the euro coins function, with one side that exhibits a national theme but is legal tender in all Eurozone countries, the CFP coins can be used in all of the French territories.