Political sketch
Formerly part of French West Africa. Independent from France on 2 October 1958.
In the mid 1400s the Portuguese visited the coast of Guinea and developed a slave trade. From the 1500s to the 1800s the Islamic Fulani empire controlled much of the interior. France, which had earlier in the 1800s sent explorers into the interior, proclaimed a protectorate over part of the area on 5 April 1849; on 12 October 1882 it proclaimed the coastal region the protectorate of Rivières du Sud. The region was administered with Senegal until becoming the separate colony of French Guinea and dependencies on 17 December 1891. A French decree of 10 March 1893 broke off Dahomey (now Benin) and Côte d'Ivoire from French Guinea and made them into separate colonies. On 16 June 1895 it became part of the federation of French West Africa. France enlarged the colony by adding territories on the right bank of the Niger River and in the hinterland of Sierra Leone and Liberia and by the cession in 1904 of the Los Islands from Great Britain. Some parts of the colony required military intervention to force acknowledgment of French control. During the Second World War, French West Africa initially adhered to the French government of Vichy, which was something between neutral and allied with Germany, but on 23 November 1943, about two weeks after the Allied invasion of French Morocco and Algeria, it switched allegiance to the Free French government and joined the Allies. In 1946 Guinea became an overseas territory of France.
On 2 October 1958 Guinea became independent rather than join the French Community; it was the first French colony in sub-Saharan Africa to gain independence. The first president Sékou Touré, pursued highly interventionist economic policies and withdrew Guinea from the economic institutions that bound together other former French colonies in the region. The results were bad. In 1970, Guinean exiles and Portuguese troops from neighboring Guinea-Bissau failed in their attempt to invade the country. Relations with Guinea-Bissau deteriorated in 1980 over a disputed maritime zone that was believed to contain petroleum. After Touré's sudden death on 26 March 1984 Lansana Conté soon came to power, where he remains today (2005). He began to abandon the centralized economic control and political isolationism that had characterized his regime. The first multiparty presidential election was held in 1993 but was marked by irregularities. Military officers turned a mutiny of February 1996 into an attempted coup but failed to take power. The main exports are aluminum and other metals.
Wars since 1500
Dutch-Portuguese Wars in West Africa, about 1620-55; French conquest, 1890s; attempted invasion by Portugese troops and Guinean exiles, 22 November 1970; mutiny of February 1996.
Convertibility
The French franc zone:
When the First World War began, France imposed a moratorium of payments on all negotiable instruments starting 1 August 1914. The moratorium was subsequently extended by decrees until 1 March 1915. The central bank, the Bank of France, abandoned the gold standard on 5 August 1914, although no official prohibition on exporting gold existed until by a decree of 3 July 1915, affirmed by a law of 15 November 1915. A decree of 2 April 1918 prohibited capital exports without authorization. A law of 25 June 1928 officially restored the gold standard and repealed exchange controls. When the French franc was an object of currency speculation , a law of 13 August 1936 imposed extensive exchange controls, supplementing some lesser measures that had been implemented in 1935.
France imposed exchange controls on 9 September 1939 by a decree of that date, soon after the Second World War broke out. On 20 May 1940, capital controls within the franc zone were greatly relaxed by a French decree of that date. Exchanges between France and its African colonies were cut off from the time of the Allied invasion of French Morocco and Algeria in November 1942 to about September 1944, by which time the Allies had liberated Paris and the main French port cities. Exchange controls within the franc zone were not removed until 6 June 1946. Afterwards, the CFA franc became convertible both for current- and capital-account transactions within the French franc zone (France, Monaco, And French possessions, including countries using the CFA franc). Outside the French franc zone it became convertible for current-account transactions when France resumed current-account convertibility, but it was not convertible for capital-account transactions. France had multiple exchange rates from 26 January 1948 until 17 October 1948, and a dual exchange rate from 18 October 1948 to 29 September 1949. On 20 September 1949 it devalued the French franc and unified the exchange rate, taking advantage of the lead offered by the United Kingdom, which had devalued the pound sterling on 18 September 1949.
Guinea alone:
France in effect forced Guinea out of the French franc zone on 7 March 1960, shortly after Guinea established its own central bank and an office of exchange control (Office des Changes) in the central bank. (Guinea, Ordonnance No. 060, 29 February 1960, cited in BCEAO 2000, v. 2: 62, created the office of exchange control.) A communiqué of the French Minister of Finance and Economic Affairs announced on 7 March 1960 that France was suspending all financial transactions with Guinea. France was unsuccessfully attempting to keep Guinea within the regional institutions established for the soon to be independent French colonies of the region. Guinea dropped restrictions on all current transactions on 1 July 1994 (IMF ARER 1995: 205).
Other
The French government established the CFA franc on 26 December 1945. The CFA franc became the unit of account in French colonies in sub-Saharan Africa and the Americas that had previously used a local franc equal to the French franc. Local francs in North Africa (Algeria, Tunisia, and Morocco) and Djibouti remained in effect fully attached to the French franc. French colonies in the Pacific established a unit of account called the CFP franc, while Indochina, Syria and Lebanon, and Pondicherry (India) already had currencies that were not called francs. The CFA franc enabled the French government to make exchange rate policy in the colonies different from that in France. When making devaluations of the French franc against gold and the US dollar on 26 December 1945 and 17 October 1948, the French government devalued the CFA franc less, implying a revaluation against the French franc. The meaning of "CFA" was initially Colonies Françaises d'Afrique (colonies of France in Africa). In Africa, the meaning changed when the colonies established central banks in preparation for political independence. CFA came to mean Communauté Financière Africaine (African financial community) for the member countries of the Banque Centrale des États de l'Afrique de l'Ouest (BCEAO, opened 4 April 1959). It came to mean Coopération Financière en Afrique Centrale (financial cooperation in Central Africa) for the member countries of the Banque Centrale des États de l'Afrique Équatoriale et du Cameroun (BCEAC, also opened 4 April 1959), which since 22 November 1972 has been called the Banque des États de l'Afrique Centrale (BEAC).
Defaults on or restructurings of debt to the private sector (mainly from Purcell and Kaufman 1993 and Standard & Poor's 2004): 1986-1998 (foreign currency bank debt, as a result of oil and interest rate shocks), 1991-1998 (foreign currency bank debt).
Banking crises (data since 1970s mainly from Caprio and Klingebiel 1999 and Frydl 1999): A major crisis 1982-1985, with six banks having 99% of deposits insolvent in 1985; three banks with 45% of deposits were in trouble 1993-1994.
Frankel and Rose (1996) list of currency crashes: 1986.
References
Primary sources:
--Laws and decrees:
France. Gazette. 1762-present. Gazette de France (1762-1789); Gazette nationale de France (1789-1799); Bulletin des lois (1791-1831; a separate publication); La gazette nationale ou le moniteur universel (1799-1810); Moniteur universel (1811-1848); Moniteur universel: journal officiel de la République française (1848-1852); Journal officiel de l'Empire français (1852-1870); Journal officiel de la République française (1871-1941); Journal officiel de l'État français (Vichy France, 1941-1944); Bulletin officiel des Forces françaises libres (Free France, 1940-1941); Journal officiel de la France libre (Free France, 1941); Journal officiel de la France combattante (Free France, 1941-1943); Journal officiel du Haut commissariat de France en Afrique (Free France, 1943); Journal officiel du Commandement en chef français en Afrique (Free France, 1943); Journal officiel de la République française (Free France, 1943-1944; France, 1944-present). Paris (1762-1940, 1944-present); Vichy (1940-1944); London (Free France, 1941-1943); Algiers (Free France, 1943-1944): Imprimerie des Journaux Officiels (1944?-present). Many issues are in France, Legifrance Web site (see below).
France. Legifrance Web site, <http://www.legifrance.gouv.fr>. Reference site for French treaties, laws, and decrees, including the full text for recent items.
France. Overseas gazette. 1887-1961. Bulletin officiel (1887-1953; new series, 1953-1959); Bulletin officiel de l'administration provisoire des services du Ministère de la France d'Outre-Mer (1959-1961). Issued by Ministère des Colonies (1887-1950); Ministère de la France d'Outre-Mer (1950-1961). Paris: Imprimerie Nationale.
French Guinea. Gazette. 1901-1958. Journal officiel de la Guinée française. Conakry: Imprimerie du Gouvernement. (Succeeded by Guinea gazette.)
French West Africa. Gazette. 1895-1959. Journal officiel de l'Afrique occidentale française. Saint-Louis, Senegal (1895-1905?); Gorée (1905-?); Dakar (?-1959).
Guinea. Gazette. 1958-present. Journal officiel de la République de Guinée (1958-1979); Journal officiel de la République populaire revolutionnaire de Guinée (1979-present). Conakry: Imprimerie du Gouvernement; later Imprimerie Nationale. (Successor to French Guinea gazette.)
--Publications of monetary authorities:
Banque Centrale de la République de Guinée. Annual report. 1991?-present. Rapport annuel d'activités au.... Conakry: Banque Centrale de la République de Guinée.
Banque Centrale de la République de Guinée. Bulletin. 1987-present. Bulletin trimestriel d'études et de statistiques. Conakry: Banque Centrale de la République de Guinée.
Banque de l'Afrique Occidentale. Annual report. 1901/1902-1964/1965. Assemblée générale ... procès-verbal et rapport du conseil d'administration. Paris: Banque de l'Afrique Occidentale.
Banque de l'Afrique Occidentale. Bulletin. 1956-1965? Bulletin économique et financier France-Afrique noire. Paris: Banque de l'Afrique Occidentale.
BCEAO. Banque Centrale des États de l'Afrique de l'Ouest. Annual report. 1959-present. Rapport d'activité (1959-1989); Rapport annuel (1990-present). Paris (1959-1977); Dakar (1978-present): Banque Centrale des États de l'Afrique de l'Ouest.
BCEAO. Banque Centrale des États de l'Afrique de l'Ouest. Bulletin. 1959-present. Notes d'information et statistiques. Paris (1959-1978); Dakar (1978-present): Banque Centrale des États de l'Afrique de l'Ouest.
IEAOFT. Institut d'Émission de l'Afrique Occidentale Française et du Togo. Annual report. 1955/1956-1958. Rapport d'activité. Paris: Institut d'Émission de l'Afrique Occidentale Française et du Togo.
IEAOFT. Institut d'Émission de l'Afrique Occidentale Française et du Togo. Bulletin. 1956-1959.Notes d'information et statistiques. Paris: Institut d'Émission de l'Afrique Occidentale Française et du Togo.
--Web site of the current monetary authority (viewed 20 September 2005):
<http://www.bcrg.gov.gn>
--Other publications or Web sites:
Comité Monétaire de la Zone Franc. Secrétariat. 1953-present. Premier [etc.] rapport annuel du Comité de la zone franc établi en exécution du décret du 5 fevrier 1952 (art. 4, §2) (1953-1956); La zone franc en 1957: cinquième rapport annuel du Comité Monétaire de la Zone Franc (1957); La zone franc en ...: rapport publié par le Secrétariat du Comité Monétaire de la Zone Franc (1958-1983); La zone franc: rapport ...: publié par le Secrétariat du Comité Monétaire de la Zone Franc (1984-1991); La zone franc: rappport annuel ...; publié par le Secrétariat du Comité Monétaire de la Zone Franc (1992-2003; inside page says La zone franc en ...); Rapport annuel de la zone franc (2004-present; inside cover says La zone franc: rapport annuel ...). Paris: Imprimerie Nationale (1953-1956); Secrétariat du Comité Monétaire de la Zone Franc (1957-1991; 1957 is a mimeo with no explicit publication information); Banque de France (1992-present). Recent issues are available on the Web site of the Banque de France, <http://www.banque-france.fr/fr/eurosys/zonefr/zonefr.htm>.
France. Commision de Surveillance des Banques Coloniales. 1875-1939. Rapport au président de la république sur les opérations des banques coloniales d'émission pendant l'exercise ... (1873/1874-1936/1937); Rapport au président de la république sur les opérations des banques coloniales d'émission ... (1927/1929-1936/1937). Paris: Imprimerie Nationale.
Main secondary sources:
Alibert, Jacques. 1983. De la vie coloniale au défi international: Banque du Sénégal, BAO, BIAO, 130 ans de banque en Afrique. Paris: Chotard et Associés Éditeurs.
Doré, Ansoumane. 1986. Économie et société en République de Guinée 1958-1984, et perspectives… Chenove, France: Éditions Bayardère.
Gérardin, Hubert. 1989, 1994. La zone franc. Tome 1: histoire et institutions. Tome 2: La dynamique de l'intégration monétaire et ses contraintes. Paris: Éditions L'Harmattan.
IMF ARER. 1950-present. International Monetary Fund. Annual Report on Exchange Restrictions (1950-1978), Annual Report on Exchange Arrangements and Exchange Restrictions (1979-1988), Exchange Arrangements and Exchange Restrictions: Annual Report (1989-present). Washington: International Monetary Fund. (Contains information on IMF member countries and some of their dependencies.)
Leduc, Michel. 1965. Les institutions monétaires africaines: pays francophones. Paris: Éditions A. Pedone.
Pick's Currency Yearbook. 1955-1977/79. New York: Pick Publishing. Succeeded by Pick's World Currency Report and later World Currency Yearbook.
World Currency Yearbook. 1984-1990/93. Brooklyn, New York: International Currency Analysis. Previously called Pick's Currency Yearbook (1955-1979) and Pick's World Currency Report (1980-84). New York: Pick Publishing Corporation.
Monetary authorities: Guinea
| Dates | Type | Name | Source | Remarks |
| 6 January 1902
-30 September 1955 |
private monopoly issue (as part of a currency union) | Banque de l'Afrique Occidentale (headquarters Paris, France) | France, decree of 29 June 1901 (establishing Banque de l'Afrique Occidentale); law of 29 January 1929 (extending its charter for 20 years and introducing minority government ownership); both reprinted in BCEAO (2000, v. 1: 301-3, 380-3) | The Banque de l'Afrique Occidentale was established to be the note issuer for all of French West and Equatorial Africa. It opened a branch in Conakry on 6 January 1902, the first bank in Guinea (Alibert 1983: 60-1). The second bank was the Banque Nationale pour le Commerce et l'Industrie-Afrique (headquarters Paris, France), in Conakry, on 5 April 1941 (BCEAO 2004). During the First World War, individual colonies in French West Africa issued small-denomination government notes called bons de caisse to substitute for coins, which were scarce because of inflation, problems with transportation, and demand for metals to make weapons. The general authorization for issuance was an arrêté of the governor-general of French West Africa (cited without a specific date in Mazard 1953: 81). The first local coins were issued in 1944, being a Free French issue for French West Africa. |
| 1 October 1955
-3 April 1959 |
joint monetary institute (as part of a currency union) | Institut d'Émission de l'Afrique Occidentale Française et du Togo (IEAOFT) (headquarters Paris, France) | France, Decree No. 55-103, 20 January 1955; Decree No. 55-938, 15 July 1955; interministerial arrêté of 29 September 1955 | France nationalized the note issue in accord with its policy since the 1930s. France, decree of 31 August 1957, transferred the issuance of coins from the French Treasury to the IEAOFT effective 1 October 1957. Notes for different member countries were issued with different serial number codes to provide a basis for calculating each country's share of seigniorage. |
| 4 April 1959
-29 February 1960 |
joint central bank (as part of a currency union) | Banque Centrale des États de l'Afrique de l'Ouest (BCEAO) (headquarters Paris, France) | France, Ordonnance No. 59-491, 4 April 1959 | The monetary institute was converted into a central bank to prepare for the imminent independence of its members. Notes for different member countries continued to be issued with different serial number codes to provide a basis for calculating each country's share of seigniorage. |
| 1 March 1960
-26 July 1961 |
own central bank (with commercial banking functions) | Banque de la République de Guinée (headquarters Conakry, Guinea) | Guinea, Ordonnance No. 0010, 29 February 1960; Ordonnance No. 126, 12 May 1960; both reprinted in Leduc (1965: 282-4. 287-97) | Guinea withdrew from the Banque Centrale des États de l'Afrique de l'Ouest to pursue an independent monetary policy. Guinea's central bank issued coins as well as notes, and combined the functions of a central bank, commercial bank, and development bank. |
| 27 July 1961
-January 1962 |
central bank | Banque Centrale de la République de Guinée (headquarters Conakry, Guinea) | Guinea, Decree No. 276/PRG/61, 27 July 1961, reprinted in Leduc (1965: 305) | Separated the central banking functions of the former Banque de la République de Guinée from its commercial and development banking functions. Guinea nationalized most banks in 1961. The government seized the last privately owned bank, the Banque de l'Afrique Occidentale, by Guinea, decree of 6 January 1962 (cited in Alibert 1983:195). |
| January 1962
-27 June 1985 |
monobank | Banque Centrale de la République de Guinée (headquarters Conakry, Guinea) | implied by Banque de la République de Guinée Web site, viewed 16 September 2005 | Became a centrally planned economy, at least formally, by this time; a three-year plan had begun in 1960. Guinea joined the IMF on 28 September 1963. In January 1980 the note issuing functions of the central bank were attached directly to the office of the president of the country (Banque de la République de Guinée Web site, viewed 16 September 2005). The foreign exchange market became freer as of 1 December 1982, creating a crack in the monobank system; see the Exchange Rate Arrangements section, below. |
| 28 June 1985
-present (2005) |
central bank | Banque Centrale de la République de Guinée (headquarters Conakry, Guinea) | Guinea, Ordonnance No. 046/PRG/85, 6 March 1985, cited in Banque Centrale de la République de Guinée bulletin, March 1987: 36 | The law allowed banks with private ownership. The Banque Internationale pour l'Afrique en Guinée (headquarters Conakry, Guinea) was created in June 1985 with 51% government and 49% private ownership. It opened in Conakry 28 June 1985. An earlier private bank opened was the Banque Islamique de Guinée (headquarters Conakry, Guinea), in Conakry, founded in May 1983. It was a special case, lending according to Islamic principles and therefore charging no explicit interest. It had less than 5% of all bank deposits and loans. All six state-owned banks were closed on 22 December 1985 because of their financial problems (Guinea, Ordonnance Présidentielle No. 314/PRG/85, 22 December 1985, cited in Banque Centrale de la République de Guinée bulletin, March 1987: 4). |
Exchange rate arrangements: Guinea
| Dates | Official arrangement | Source | Unofficial arrangement, if different | Remarks |
| 1866
-5 January 1902 |
fixed (as part of a currency union); used French franc and later franc notes of Banque de l'Afrique Occidentale | France, Règlement du Commandant et Administrateur du Sénégal et Dépendences, 15 June 1826, cited in Leduc (1965: 13) | The first French fort was established in 1866. Guinea was decreed a French colony subordinate to Senegal on 12 October 1882. The 1826 regulation cited forbade colonial units of account; only legally admitted monies or French money was allowed in administrative, judiciary, or commercial activities. French African colonies admitted British coins and in some instances silver Maria Theresa thalers as legal tender up to the mid 1920s, and perhaps later in some cases. The French franc was a decimal currency. | |
| 6 January 1902
-22 November 1943 |
pegged (as part of a currency union); 1 local franc = 1 French franc | Alibert (1983: 60-1) | The Banque de l'Afrique Occidentale established a branch in Guinea, so the exchange rate changed from fixed to pegged. The bank was required starting in 1929 to make exchanges between France and West Africa without commission fees other than the actual cost of post office or telegraph costs (France and Banque de l'Afrique Occidentale, agreement of 24 February 1927, article 8, reprinted in BCEAO 2000, v. 1: 378). Legally, local francs in what was to become the CFA franc zone were not separate from the French franc until 26 December 1945. | |
| 23 November 1943
-5 December 1944 |
pegged (as part of a currency union); 200 local francs = UKŁ1, or 50 local francs = US$1 | Anglo-Free French agreement of 2 February 1943, cited in Mazard (1953: 106) | By the agreement of 2 February 1943, in many of the areas under its control, the Free French government devalued local francs from pre-Second World War rates based on 176.625 French francs = UKŁ1, or 43.80 French francs = US$1. French West Africa switched allegiance from the Vichy French government to the Free French government on 23 November 1943. | |
| 6 December 1944
-25 December 1945 |
pegged (as part of a currency union); 1 local franc = 1 French franc | Anglo-Free French agreement of 8 February 1944, cited in Mazard (1953: 106) | Following the liberation of most of France by the Allies during the Second World War, the metropolitan French franc was devalued to the level of the overseas francs under Free French control (200 local francs = UKŁ1, or 50 local francs = US$1). Doing so in effect restored the French franc as the anchor currency. | |
| 26 December 1945
-16 October 1948 |
pegged (as part of a currency union); 1 (West African) CFA franc = 1.70 French francs | France, Decree No. 45-0136, 25 December 1945 | The CFA franc created at a premium from the former 1-to-1 rate of local francs with the French franc. The premium offset most of the French franc's devaluation from 50 to 119.10699 French francs = US$1 on 25 December 1945. The revaluation reflected lower wartime economic destruction in the colonies than in France. The new cross rate with the pound sterling was 300 CFA francs = UKŁ1. The name "franc" for the currency came from the French franc. For the meaning of CFA, see the category "Other" in the country information above. | |
| 17 October 1948
-31 December 1959 |
pegged (as part of a currency union); 1 (West African) CFA franc = 2 French francs | France, Ministry of Finance and Economic Affairs, Avis No. 352 de l'Office des Changes, 17 October 1948 | The CFA franc had followed the French franc's devaluation on 26 January 1948, but this time it was in effect revalued against the French franc to offset almost all of the French franc's devaluation from 214.392 to 264 French francs = US$1 on 17 October 1948. | |
| 1 January 1960
-29 February 1960 |
pegged (as part of a currency union); 50 (West African) CFA francs = 1 new French franc | France, Ordonnance No. 58-1341, 27 December 1958; Ministry of Finance and Economic Affairs, Circulaire du 19 novembre 1959 relative au nouveau franc, 19 November 1959; Decree No. 59-1450, 22 December 1959 | France redenominated its franc at 1 new French franc = 100 old French francs. Members of the CFA franc zone never registered gold parities with IMF. Gold convertibility for all countries ended in practice when the United States abandoned the gold standard on 15 August 1971. | |
| 1 March 1960
-January 1962 |
pegged; 50 Guinea francs = 1 new French franc, or 1 Guinea franc = 0.0036g gold | Guinea, Ordonnance No. 009, 20 February 1960, reprinted in Banque de la République de Guinée Web site, viewed 16 September 2005 | Pick's Currency Yearbook (1969: 239) says the parallel market premium began at 60% in March 1960 and rose. | Guinea introduced a national franc introduced at 1 Guinea franc = 1 CFA franc. |
| January 1962
-7 July 1966 |
repressed (pegged); 50 Guinea francs = 1 new French franc, or 1 Guinea franc = 0.0036g gold | implied by Banque de la République de Guinée Web site, viewed 16 September 2005 | Pick's Currency Yearbook (1969: 239) says the parallel market premium rose to triple digits by 1965. | The monetary system became a monobank, so the exchange rate became a repressed rate. A currency confiscation occurred on 10 March 1963. Notes were exchanged at 1:1, but notes not turned in during the short conversion period, 11-14 March 1963, were declared worthless (Guinea, decree of 1 March 1963, implies Doré 1986: 474; Leduc 1965: 305 gives only the date of publication in the Journal officiel de la République de Guinée, 1 April 1963). This measure was aimed at making worthless the Guinea francs held abroad. |
| 8 July 1966
-9 August? 1969 |
repressed (pegged); 50 Guinea francs = 1 new French franc, or 1 Guinea franc = 0.0036g gold, or 247 Guinea franc = US$1 | IMF ARER (1966: 272) | Pick's Currency Yearbook (1969: 239) records a parallel market premium in triple digits. | Guinea never registered a gold parity with the IMF, but it did register this provisional exchange rate against the US dollar. |
| 10 August? 1969
-22 August 1971 |
repressed (pegged, multiple rates); official rate 44.44 Guinea francs = 1 French franc, or 1 Guinea franc = 0.0036g gold, or 246.853 Guinea francs = US$1 | no action by Guinea | RR: Parallel market premium in mid double digits from July 1970, when montly data start. | Guinea did not follow the devaluation of the French franc on 8 August 1969, although the Guinea franc had such extensive restrictions on convertibility that France's action had little practical effect on it. Sometime in 1969, perhaps on 10 August, Guinea introduced multiple exchange rates by widening its intervention spread from 247-255 Guinea francs = US$1 (already wider than the +/-1% maximum margins the IMF wanted its members to maintain) to 246-272 Guinea francs = US$1. Bilateral payments were settled at 246.853 Guinea francs = US$1 (IMF ARER 1970: 209). |
| 23 August 1971
-31 December 1971 |
repressed (pegged, multiple rates); official rate 44.44 Guinea francs = 1 French franc, or 1 Guinea franc = 0.0036g gold (nominally), or 246.853 Guinea francs = US$1 | IMF ARER (1972: 191) | RR: Parallel market premium in high double digits, rising to 700% late in 1971. | Gold convertibility for all countries ended in practice when the United States abandoned the gold standard on 15 August 1971. Guinea did not have a gold parity registered with the IMF, although one existed in national law. |
| 1 January 1972
-1 October 1972 |
repressed (pegged, multiple rates); official rate 44.44 Guinea francs = 1 French franc, or 1 Guinea franc = 0.0036g gold (nominally), or 227.36 Guinea francs = US$1 | IMF ARER (1972: 191-2; 1973: 215) | RR: Parallel market premium in high triple digits. | Guinea did not follow the devaluation of the US dollar against gold on 18 December 1971, instead revaluing to preserve its now merely nominal gold parity. |
| 2 October 1972
-12 February 1973 |
repressed (pegged, multiple rates); official rate 4.44 Guinea sylis = 1 French franc, or 1 Guinea syli = 0.036g gold (nominally), or 22.736 sylis = US$1 | Guinea, Horoya (publication of the state and ruling party) of 2 October 1972, cited in Doré (1986: 476); IMF ARER (1973: 215) | RR: Parallel market premium starting in mid double digits, then rising above 100%. | Introduced a new currency at 1 Guinea syli = 10 Guinea francs. "Syli" means "elephant" in Sosso, a native language, and the elephant was the symbol of Guinea's ruling party. The new currency was introduced because old notes had been extensively counterfeited, totaling as much as 8 billion Guinea francs. |
| 13 February 1973
-10 June 1975 |
repressed (pegged, multiple rates); official rate 1 Guinea syli = 0.036g gold (nominally), or 20.463 sylis = US$1 | IMF ARER (1974: 193) | RR: Parallel market premium generally 100-200%. De facto band around US dollar. Band width +/-5%. Parallel market premium occasionally exceed 1,000%. | Did not follow the devaluation of the US dollar on 13 February 1973. |
| 11 June 1975
-1977 |
repressed (pegged to rigid basket, multiple rates); official rate 1 Guinea syli = 0.036g gold (nominally), or 24.6853 Guinea sylis = 1 SDR | IMF ARER (1976: 212) | RR: Parallel market premium generally 100-200%. De facto moving peg to US dollar. Active parallel market. | Switched to the SDR as the anchor currency. At this exchange rate, the initial cross rate with the US dollar was 19.805 Guinea sylis = US$1, a slight revaluation. |
| 1977
-31 March 1978 |
repressed (pegged to rigid basket); 1 Guinea syli = 0.036g gold (nominally), or 24.6853 Guinea sylis = 1 SDR | IMF ARER (1978: 183, 473) | RR:Parallel market premium falling from above 200% to high single digits. To October 1978, de facto moving peg to US dollar. Active parallel market. | Discontinued broken cross rates, so that by the end of 1977 IMF ARER no longer lists Guinea as having multiple exchange rates. |
| 1 April 1978
-30 November 1982 |
repressed (pegged to rigid basket); 24.6853 Guinea sylis = 1 SDR | International Monetary Fund, Board of Governors, Resolution No. 31-4, 30 April 1976 ("Second Amendment") | As of April 1981, Doré
(1986: 480) notes a
black market rate of 1
Guinean syli = 0.04-0.05 French francs,
versus an official rate
of 0.22 French francs.
RR: Parallel market premium rising from mid double digits to above 400%. From November 1978, de facto moving peg to US dollar. Band of +/-2% for official rate, +/-5% for parallel rate. |
The system of gold par values officially ended by agreement of IMF members. A currency exchange occurred on 17 April 1981 (Horoya No. 2865, 19-25 April 1981: 4-6 and No. 2867, 3-9 May 1981, both cited in Doré 1986: 479). The currency exchange may have been a currency confiscation. The government undertook the exchange to hurt the black market. Details on the amount of cash people could exchange and the rate at which they could do so are not readily available to me (nor are they mentioned in World Currency Yearbook 1989: 313, which has a brief mention of the episode). |
| 1 December 1982
-6 October 1985 |
pegged to rigid basket, dual rate; official rate 24.6853 Guinea sylis = 1 SDR | IMF ARER (1983: 226) | The second, "free" rate
was flexible.
RR: Parallel market premium often above 1,000%. De facto crawling band of +/-5% around US dollar. |
The official rate was used only in official transactions; other transactions had to be conducted at the separate "free" exchange rate. This liberalizing measure was part of an economic stabilization program. |
| 7 October 1985
-3 January 1986 |
pegged to rigid basket, dual rate; official rate 24.6853 Guinea sylis = 1 SDR | Guinea, Ordonnance No. 238/PRG/85, 28 September 1985, cited in Banque Centrale de la République de Guinée bulletin, March 1987: 37 | RR: Parallel market premium often above 1,000%. Band of +/-5%. | Established a "second market" rate of 36 Guinea sylis = US$1 for certain transactions. |
| 4 January 1986
-31 May 1986 |
pegged, dual rate; official rate 300 Guinea francs = US$1 | Guinea, Ordonnance No. 001/PRG/86, 3 January 1986 (relating to exchange rate), cited in Banque Centrale de la République de Guinée bulletin, March 1987: 4; Ordonnance No. 004/PRG/86, 3 January 1986 (relating to new currency), cited in Banque Centrale de la République de Guinée bulletin, March 1987: 38; IMF ARER (1987: 243) | The "second market"
rate was temporarily
set at 340 Guinea sylis
= US$1 until an
auction market could
begin. The auction rate
was allowed to float on
28 January 1986.
RR: Parallel market premium below 30%. Band of +/-5%. |
Government introduced a new currency to signal a new approach to economic policy. The Guinea franc replaced the syli at 1 Guinea franc = 1 Guinea syli. The exchange period was 6-28 January 1986. Guinea also switched the anchor currency to the US dollar and devalued from a previous implied cross rate of 22.53727 sylis or Guinea francs = US$1. |
| 1 June 1986
-31 January 1991 |
independent float | IMF ARER (1987: 243) | RR: Parallel market premium generally in very low double digits. Peg to US dollar / freely falling to December 1986; peg to US dollar from January 1987. | Unified the exchange rate. |
| 1 February 1991
-2003 |
managed float against SDR (IMF: independent float from 1 July 1994, reclassified as managed float 30 June 2001 reclassified as pegged 1 January 2002) | Guinea, Ordonnance No. 0/91/012, 26 January 1991, cited in Banque Centrale de la République de Guinée bulletin, March 1991: 29; IMF ARER (1995: 205; 2002: 396; 2003: 412) | Banque Centrale de la
République de Guinée
annual reports and
bulletins list parallel
market premiums in
single digits. The
central bank
maintained a de facto
peg of 1,976 Guinea
francs = US$1 by 1
January 2002 and
thereafter.
RR: Parallel market premium typically in single digits to December 1998, when data end. De facto crawling band around US dollar with band width of +/-2% to May 1991; de facto crawling peg to US dollar May-August 1991; de facto crawling peg to US dollar to August 1991-September 1999; de facto crawling band around US dollar with band width of +/-2% September 1999-April 2000; managed float May 2000-December 2001. |
Switched to the SDR
as the anchor currency
to reduce the effect of
fluctuations in third
currencies. During
1991 the exchange rate
depreciated from
967.44 Guinea francs
= 1 SDR on 1 January
to 1,150 Guinea francs
= 1 SDR on 31
December. IMF ARER
(1995: 205) gives the
impression that the
SDR ceased to be the
target sometime in
1994, but central bank
publications do not
support it; the central
bank bulletin
continues to mention
the SDR rate through
the second quarter of
1999, so I call the
exchange rate a
managed float
throughout the period.
The IMF reclassified
the exchange rate as a
managed float in 2001
because "there is evidence that the authorities are indirectly intervening in the foreign exchange market as conditions require." In 2002 the IMF reclassified the exchange rate as a peg of 1,976 Guinea francs = US$1 because the rate had been holding steady, but officially the rate remained a managed float. |
| 2003
-28 February 2005 |
pegged, dual rate; official rate 1,976 Guinea francs = US$1 | IMF ARER (2004: 394) | A significant number of transactions occurred in the parallel market at a large premium to the official rate. (IMF ARER 2004: 394). The parallel market rate was apparently an independent float. | The second exchange rate was a parallel rate. Apparently it was officially tolerated, and that is the basis on which the IMF seems to classify Guinea as having an official dual rate. |
| 1 March 2005
-present (2005) |
managed float, dual rate | IMF ARER (2005: 409) | The parallel market continued (IMF ARER 2005: 404). The parallel market rate was apparently an independent float. | The central bank ceased the official exchange rate auction, leading the IMF to reclassify the exchange rate arrangement. |