The FCFA's fixed parity with the euro

A rate that never moves

Unlike most currencies, the FCFA has no floating exchange rate against the euro. Since 1 January 1999, the parity has been fixed, according to BEAC. One euro is worth exactly 655.957 FCFA, every single day of the year.

Where the number comes from

Before the euro existed, the French franc and the Central African CFA franc were already locked to each other at a fixed rate. France adopted the euro on 1 January 1999, and that old rate was simply carried over. That is what produces the 655.957 figure still used today.

Who issues the FCFA

The Bank of Central African States (BEAC) is headquartered in Yaoundé. It alone has the right to issue the FCFA as legal tender across the six CEMAC countries, Cameroon among them.

What this means for a household

Because the rate is fixed, the FCFA price of a good imported from Europe does not move on account of the exchange rate itself. Only its euro price does, before shipping or customs duty are even added. According to BEAC, the FCFA's convertibility into euros is also guaranteed by the French Treasury. That guarantee sets the FCFA apart from most African currencies, whose rates against the euro shift daily.

A simple calculation

Because the rate never changes, converting a euro price into FCFA is just a multiplication by 655.957. A trader importing goods invoiced in euros can work out the FCFA cost in advance. There is no need to worry that the rate will have shifted by the time payment falls due, unlike in a country whose currency floats against the euro.

Stability, not low prices

A fixed rate shields a household from an exchange rate that suddenly collapses. But it does not shield anyone from rising prices themselves, in Europe or elsewhere, or from local inflation. A Cameroonian household still feels world prices move — it just never feels the FCFA-euro exchange rate move, because it does not.