What Is the Cape Verde Escudo (CVE)?

CVE is the ISO 4217 currency code for the Cape Verde escudo, the official national currency of the island nation of Cape Verde. The Cape Verde Escudo (CVE) subunit is called centavo. The dollar symbol ($) is used in lieu of a decimal point. Therefore, 20 escudos is written as 20$00. The Banco de Cabo Verde issues the country's currency. It mints coins in 1, 5, 10, 20, 50 and 100 denominations and prints banknotes in 200, 500, 1,000, 2,000, and 5,000 denominations.

Key Takeaways

  • The Cape Verde Escudo (CVE) is the national currency of the African island nation of Cape Verde.
  • The CVE was pegged to the Portuguese escudo, as the country was formerly a Portuguese colony.
  • When Portugal's currency was replaced by the euro, the CVE effectively became pegged to the euro as well.

Understanding the Cape Verde Escudo (CVE)

Cape Verde is a former Portuguese colony. The CVE replaced the former national currency, the Cape Verde real, which was equivalent to the Portuguese real. Portugal has since become a member of the European Union and adopted the euro as its currency. Since 1998, the Cape Verde escudo is technically pegged to the euro, owed to the fact that the currency is officially pegged to the Portuguese escudo, which was later replaced by the euro.

The Cape Verde escudo replaced the Rei in 1914, where one Escudo = 1,000 Reis. The escudo was valued the same as the Portuguese Escudo. In 1998, the CVE was pegged to the Portuguese Escudo at 1 Portuguese Escudo = 0.55 CVE. When the Portuguese escudo was replaced by the euro, the CVE was pegged to the Euro at 110$265 Escudos = 1 Euro. In 1992, a third round of banknotes was issued and, in 2005, the 200-escudo note was redesigned and distributed in celebration of 30 years of independence. This 2005 issue has been withdrawn from circulation. There is another version that was circulated in 2015.

The Economy of Cape Verde

Cape Verde is considered a middle-income country. It is part of the Small Island developing states. According to Oanda, a currency data provider, Cape Verde's economy lacks sufficient resources to sustain itself. The economy is mostly based on service industries, which represent approximately 73% of the GDP. The economy has been growing steadily and, in 1994 and 1995, the country received 50 million USD in foreign investments.

With respect to industry, according to Oanda, agriculture represents 9% of the total GDP, and industry represents 16.5% of the total GDP. The main export products are fish, hide, shoes, garments, and fuel. The main import products are industrial, fuels, foodstuffs, and transport equipment. Top industries are garments, shoes, salt mining, fish processing, ship repair, beverages, and food. The proportion of unemployed is estimated at 13.4% of the population. Inflation is estimated at 1.1%. Portugal still provides Cape Verde with resources to boost its economy.