Economy & Politics

Euro and CFA Franc advance against USD dollar

The euro was up 0.36% against the greenback, to $ 1.1857 taking the CFA Franc ($ 0.0018) on board. The European currency which is linked by a fixed parity to the African Franc (1 euro = 655 CFA Franc) had appreciated significantly Thursday in the wake of a meeting of the European Central Bank, before wiping out a good part of its gains .

The European currency had particularly benefited from the remarks of the president of the institution Christine Lagarde concerning the strength of the euro, which weighs on inflation. According to the boss of the ECB, there is no need to act at this stage. Many observers believe that a strong euro would be a drag on exports for the euro zone. In Africa, where the greenback has lost 6.58% against the CFA franc over a sliding year, it is widely accepted that a strong franc would also be a drag on competitiveness. The countries of Central Africa, exporters of crude (invoiced in dollars) and importers of food products (in euros) do not gain at the exchange rate even if it is accepted that imports outside the euro zone (China for example) are denominated in dollars.

On the West African side, the impact of a strong appreciation against the dollar would be less but not zero. Ivorian cocoa exports to Amsterdam will not suffer in any case, “draws an import-export operator recalling that the economic structure of West Africa, more dependent on its domestic market than on exports of raw materials, deserves greater attention ”. In the meantime, not sure that the strong CFA Franc is the best asset for diversification.

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Journalist for 20 years in the African economic press and author of several surveys and reports. Covered several summits of the African Union, the African Economic Commission and the African Development Bank.

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