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Working Paper 166 - Misalignment of Real Effective Exchange Rates: When Should the Franc CFA be Devalued Again?


Each of the CFAF zones – be it the West African Economic and Monetary Union (WAEMU) or the Economic and Monetary Community of Central African States (CEMAC)2 – has a common currency, one monetary policy and a peg system to the Euro. Since March 2010, the monetary authorities of the CFA member countries have implemented reforms that enabling central banks to adopt new statutes stipulating that the main objective of the monetary policy is to ensure price stability. However, beyond keeping inflation under control, this monetary policy plays a vital role in ensuring that the economy of member countries remains competitive. The growth of African economies is essentially sustained by export earnings and by how competitive they are on the world market.

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