The CFP franc

Who issues the franc in the Pacific

The Institut d'émission d'outre-mer, or IEOM, acts as the central bank for the French overseas collectivities that use the Pacific franc: New Caledonia, French Polynesia and Wallis and Futuna. It has issued the currency since 1967 from its headquarters in Paris, through local branches in each territory. Nothing else is legal tender in the three. The IEOM Supervisory Board sets the zone's key interest rates, its refinancing mechanisms and its regulations.

Shopkeepers there must accept the notes and coins by law or face a fine, though they may ask for exact change. The collectivities belong to the French Republic, which pays in euros at home, and the coins carry RF, for République française.

Why France spared its Pacific colonies a devaluation

France ratified the Bretton Woods Agreement in December 1945 and devalued the French franc to fix its rate against the US dollar. New currencies were created for the colonies to spare them that devaluation, the CFP franc in the Pacific and the CFA franc in Africa. The other colonial currencies were fixed to the French franc. The CFP franc was fixed to the dollar instead, at 49.60 francs to the dollar from 26 December 1945, because the Second World War had given the dollar a large part in the territories' economy.

That arrangement ended in September 1949. From 21 September one CFP franc was worth 5.50 French francs. The ratio has not moved since. When France dropped two zeros from its franc on 1 January 1960 the rate became 0.055 new francs. When the euro replaced the French franc on 1 January 1999, 1,000 CFP francs were set equal to 8.38 euros.

How three territorial francs became one currency

The currency began in three forms, for French Polynesia, New Caledonia and the New Hebrides, and Wallis and Futuna used the New Caledonian one. The notes of Tahiti and New Caledonia differed only by the name of a capital, Papeete or Nouméa, printed on the back. The New Hebrides franc split off in 1969. It gave way to the vatu in 1982, after the Republic of Vanuatu was founded in 1980.

A single series of notes, identical in every territory, arrived in January 2014, and the older notes stopped circulating on 30 September that year. The IEOM still exchanges them at its offices. The series runs to 500, 1,000, 5,000 and 10,000 francs. Each note has a New Caledonian side and a Polynesian side, and both carry motifs from Wallis and Futuna. Every denomination is 6 mm longer than the one below it, so blind and partially sighted people can tell them apart.

How the IEOM redrew the coins

From 1949 New Caledonia and French Polynesia struck coins with a shared obverse and their own reverse, and either set was accepted throughout the zone. On 1 September 2021 the IEOM replaced both with one set common to all three. It dropped the 1 and 2 franc coins. They were rarely used and cost too much to produce, the institute said, and a bimetallic 200 franc piece took a place at the top of the set.

Six coins remain, from 5 to 200 francs, and only the new ones have been accepted in shops and banks since 1 December 2022. Cash totals are rounded to the nearest 5 francs: an amount ending in 1, 2, 6 or 7 goes down, one ending in 3, 4, 8 or 9 goes up. Cards are still charged to the exact franc. The franc is formally divided into 100 centimes, but no centime denomination exists and the ISO list gives the currency no minor unit.