Malagasy franc
Encyclopedia
The franc was the currency
of Madagascar
until January 1, 2005. It was subdivided into 100 centime
s.
s. These were supplemented during the First World War by emergency issues, including issues of postage stamps fixed to pieces of card in denominations of 0.05 up to 2 francs.
The Malagasy franc was introduced on July 1, 1925, by the French
government for use in the colony. The currency was issued by the government-owned Banque de Madagascar and was pegged at par to the French franc. Only banknotes were issued with French coins continuing to circulate. When the Comoro Islands
became a separate French territory, the name of the issuing bank was changed to Banque de Madagascar et des Comores. The Madagascar-Comores CFA franc
(XMCF) replaced the Malagasy franc on December 26, 1945, with the creation of the other CFA francs. The CFA franc was worth 1.7 French francs until 1948 when a devaluation of the French currency increased the rate to 1 CFA franc = 2 French francs. When the new French franc was introduced in 1960, the rate became 1 CFA franc = 0.02 French francs.
After independence from France, the privilege to issue bank notes was transferred to the Institut d'Émission Malgache on December 31, 1961. The CFA franc was replaced by the Malagasy franc on July 1, 1963. It was pegged to the French franc with the same value as the CFA franc (1 FRF = 50 MGF), guaranteed by the French treasury. Denominations were given both in francs and ariary
, with 5 francs = 1 ariary. Madagascar left the CFA franc zone
in 1972 and the Malagasy franc was declared inconvertible
. Banknotes were issued by the Institut d'Émission Malgache until 1974 when the Banque Centrale de Madagascar (Central Bank of Madagascar) took over that function.
The peg to the French franc was kept until 1982, when a series of devaluation
s began. Finally, the franc was floated freely in May 1994. On June 1, 1995, the exchange rate had dropped to 1 FRF = 777 MGF. On January 1, 2005, it was replaced by the ariary
at a rate of 5 francs to the ariary. By then, the exchange rate was 1 FRF = 1758 MGF (with the FRF value converted from the Euro).
The first Malagasy coins were issued in 1943 by the Free French. These were bronze
50 centime and 1 franc coins bearing the Cross of Lorraine
symbol. In 1948, aluminum 1 and 2 franc coins were introduced, followed by aluminum 5 francs and aluminum bronze 10 and 20 francs in 1953.
From 1965, coins were issued denominated in both francs and ariary
.
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Following emergency issues between 1914 and 1917 related to the availability of 5, 10 and 20 franc notes, distinct Malagasy notes were introduced in 1925 in denominations of 5, 10, 20, 50, 100 and 1000 francs. The lower three denominations were replaced by coins in the 1940s and 50s, with 5000 franc notes introduced in 1950.
From 1961, banknotes were issued denominated in both francs and ariary.
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...
of Madagascar
Madagascar
The Republic of Madagascar is an island country located in the Indian Ocean off the southeastern coast of Africa...
until January 1, 2005. It was subdivided into 100 centime
Centime
Centime is French for "cent", and is used in English as the name of the fraction currency in several Francophone countries ....
s.
History
The first francs to circulate in Madagascar were French francFrench franc
The franc was a currency of France. Along with the Spanish peseta, it was also a de facto currency used in Andorra . Between 1360 and 1641, it was the name of coins worth 1 livre tournois and it remained in common parlance as a term for this amount of money...
s. These were supplemented during the First World War by emergency issues, including issues of postage stamps fixed to pieces of card in denominations of 0.05 up to 2 francs.
The Malagasy franc was introduced on July 1, 1925, by the French
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
government for use in the colony. The currency was issued by the government-owned Banque de Madagascar and was pegged at par to the French franc. Only banknotes were issued with French coins continuing to circulate. When the Comoro Islands
Comoro Islands
The Comoros Islands form an archipelago of volcanic islands situated off the south-east coast of Africa, to the east of Mozambique and north-west of Madagascar. They are divided between the sovereign state of Comoros and the French overseas department of Mayotte...
became a separate French territory, the name of the issuing bank was changed to Banque de Madagascar et des Comores. The Madagascar-Comores CFA franc
CFA franc
The CFA franc is the name of two currencies used in Africa which are guaranteed by the French treasury. The two CFA franc currencies are the West African CFA franc and the Central African CFA franc...
(XMCF) replaced the Malagasy franc on December 26, 1945, with the creation of the other CFA francs. The CFA franc was worth 1.7 French francs until 1948 when a devaluation of the French currency increased the rate to 1 CFA franc = 2 French francs. When the new French franc was introduced in 1960, the rate became 1 CFA franc = 0.02 French francs.
After independence from France, the privilege to issue bank notes was transferred to the Institut d'Émission Malgache on December 31, 1961. The CFA franc was replaced by the Malagasy franc on July 1, 1963. It was pegged to the French franc with the same value as the CFA franc (1 FRF = 50 MGF), guaranteed by the French treasury. Denominations were given both in francs and ariary
Malagasy ariary
The ariary is the currency of Madagascar. It is subdivided into 5 iraimbilanja and is one of only two non-decimal currencies currently circulating . The names ariary and iraimbilanja derive from the pre-colonial currency, with ariary being the name for a silver dollar...
, with 5 francs = 1 ariary. Madagascar left the CFA franc zone
CFA franc
The CFA franc is the name of two currencies used in Africa which are guaranteed by the French treasury. The two CFA franc currencies are the West African CFA franc and the Central African CFA franc...
in 1972 and the Malagasy franc was declared inconvertible
Convertibility
Convertibility is the quality that allows money or other financial instruments to be converted into other liquid stores of value. Convertibility is an important factor in international trade, where instruments valued in different currencies must be exchanged....
. Banknotes were issued by the Institut d'Émission Malgache until 1974 when the Banque Centrale de Madagascar (Central Bank of Madagascar) took over that function.
The peg to the French franc was kept until 1982, when a series of devaluation
Devaluation
Devaluation is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged....
s began. Finally, the franc was floated freely in May 1994. On June 1, 1995, the exchange rate had dropped to 1 FRF = 777 MGF. On January 1, 2005, it was replaced by the ariary
Malagasy ariary
The ariary is the currency of Madagascar. It is subdivided into 5 iraimbilanja and is one of only two non-decimal currencies currently circulating . The names ariary and iraimbilanja derive from the pre-colonial currency, with ariary being the name for a silver dollar...
at a rate of 5 francs to the ariary. By then, the exchange rate was 1 FRF = 1758 MGF (with the FRF value converted from the Euro).
Coins
Bronze
Bronze is a metal alloy consisting primarily of copper, usually with tin as the main additive. It is hard and brittle, and it was particularly significant in antiquity, so much so that the Bronze Age was named after the metal...
50 centime and 1 franc coins bearing the Cross of Lorraine
Cross of Lorraine
The Cross of Lorraine is originally a heraldic cross. The two-barred cross consists of a vertical line crossed by two smaller horizontal bars. In the ancient version, both bars were of the same length. In 20th century use it is "graded" with the upper bar being the shortest...
symbol. In 1948, aluminum 1 and 2 franc coins were introduced, followed by aluminum 5 francs and aluminum bronze 10 and 20 francs in 1953.
From 1965, coins were issued denominated in both francs and ariary
Malagasy ariary
The ariary is the currency of Madagascar. It is subdivided into 5 iraimbilanja and is one of only two non-decimal currencies currently circulating . The names ariary and iraimbilanja derive from the pre-colonial currency, with ariary being the name for a silver dollar...
.
Banknotes
From 1961, banknotes were issued denominated in both francs and ariary.