Political sketch
Formerly the New Hebrides. Independent from France and the United Kingdom on 30 July 1980.
Many of the northern islands that now compose Vanuatu have been inhabited by Melanesian peoples since at least 1000BC. The islands were sighted in 1606 by the Portuguese navigator Pedro Fernández de Quirós, rediscovered by the French explorer Louis de Bougainville in 1768, and named after Scotland's Hebrides Islands by the English captain James Cook in 1774. Cotton planters, mostly British and French, came to the islands about 1868. To resolve their differences, in 1887 France and the United Kingdom created a Joint Naval Commission to administer the islands. In 1906 they established a condominium (joint) government. The islands were not invaded by Japanese forces during the Second World War and became an important base for the Allies.
The first elections for a representative assembly were held in 1975. Independence was agreed upon at a 1977 conference in Paris, and a constitution was drafted in 1979. The New Hebrides became independent from France and the United Kingdom as Vanuatu (meaning "country that stands up") on 30 July 1980. Troops from Papua New Guinea quashed a secessionist uprising on the island of Espirtu Santo following independence. Tensions between French and English speakers have been a recurring theme of the country's politics since independence. The economy is based mainly on agriculture, cattle raising, and fishing. The government is democratic.
Wars since 1500
Second World War in the Pacific, 1942-1945 (Japan against United Kingdom, United States, China, Australia, New Zealand, Netherlands, and allies) (Vanuatu was not invaded but was used as a base); Espiritu Santo Revolt, 1980.
Convertibility
The sterling area:
On 2 August 1914, soon after the First World War began, the United Kingdom issued a proclamation imposing a one-month moratorium of payment for bills of exchange accepted before 4 August; an act of 3 August 1914 gave legislative sanction to the proclamation. The moratorium was subsequently extended for a month and ended on 4 November 1914. Legally the pound sterling remained convertible into gold and could be exported, but the risk to shipping from German submarines made the cost of shipment prohibitive, so the United Kingdom was in effect off the gold standard. The British government refused to include private shipments of gold in its war-risk insurance scheme. After the war, the export of gold was prohibited from 1 April 1919 under regulations that were given statutory form in 1920. On 28 April 1925 the government announced that the act would not be renewed when it expired on 31 December 1925. On 13 May 1925 the United Kingdom resumed the gold standard.
The United Kingdom abandoned the gold standard on 21 September 1931. The currencies of British colonies were almost all linked to the pound sterling through currency boards; being on a sterling-exchange standard rather than a gold-exchange standard, they followed the pound sterling off gold. Over the next few years, some former British colonies (Australia, New Zealand, South Africa) and other countries that had important trade links with the United Kingdom switched from gold to the pound sterling as their official or actual anchor. The result was termed the sterling area. The United Kingdom imposed exchange controls on 4 September 1939, the day after entering the Second World War. Most countries that were not current or former British colonies soon left the sterling area. Among the remaining countries, both current- and capital-account transactions were free of restrictions within the sterling area, but were restricted in dealings with outside countries. After the Second World War, the United Kingdom returned to the gold standard under the Bretton Woods system. It removed exchange controls on 15 August 1947, but reimposed them on 20 August 1947 after suffering a large loss of foreign reserves. Sterling had a dual exchange rate from 1961 until the United Kingdom abolished exchange controls. The sterling area remained in existence because sterling was not fully convertible. It began to crumble after the United Kingdom again abandoned the gold standard on 23 June 1972. By January 1973 the sterling area had shrunk to the British Isles and a few small British colonies; even Hong Kong had abandoned sterling as its anchor currency. The United Kingdom abolished exchange controls on 24 October 1979, ending the sterling area.
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, after the Second World War broke out in Europe. The controls were promulgated in Indochina by a decree-law of 27 September 1939. On 20 May 1940 capital controls within the franc zone were greatly relaxed by a French decree of that date. Exchanges of mail between French Indochina and France were cut off after Japan started the Second World War in the Pacific in December 1941, although telegraph communications continued until November 1942. Communications resumed in August 1945, following Japan's surrender to end the war. Exchange controls within the franc zone were not removed until 6 June 1946. Afterwards, the recently created CFP franc became convertible both for current- and capital-account transactions within the French franc zone (France, Monaco, French possessions, and 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. Under French rule, Indochina (present-day Cambodia, Laos, and Vietnam) comprised a unified currency zone. When the countries of the region established national currencies, issued by national central banks, the unified currency zone broke apart. Except in North Vietnam, which rejected continued economic ties with France after independence, some special exchange control arrangements with France persisted for a time afterwards.
French Pacific Ocean territories:
France's Pacific Ocean territories switched allegiance to the Free French government in exile in late 1940. Territories controlled by the London-based Free French government were linked to the sterling or dollar areas. After the war, their currencies were revalued against the French franc.
What is now Vanuatu was an exception to French exchange control and from late 1940 fell under Australian exchange control.
Australia alone:
Australia imposed an embargo on shipments of gold from 14 July 1915, after the First World War had begun, through 24 April 1925 (Australia, proclamation of 14 July 1915). Australia imposed exchange controls on 28 August 1939, shortly before as the Second World War began. In January 1976 Australians became free to buy and sell gold in Australia; previously, they had been required to sell it to the central bank within one month.
Australia left the sterling area on 23 June 1972.
The monetary area of Australia included Papua and New Guinea from the First World War until Papua New Guinea left it on 1 January 1976.
Vanuatu alone:
Under the 1944 Anglo-French Financial Agreement, the New Hebrides Islands were officially part of the franc zone maintained by the Free French government, but in practice they became part of the sterling area and were subject to its exchange controls. Some type of convertibility crisis occurred in connection with the New Hebrides franc in 1947, perhaps related to the pound sterling being fully convertible temporarily while the French franc still had exchange controls. (The Australian pound, which was used in the New Hebrides, was pegged to the pound sterling at the time.) On 6 January 1971, the New Hebrides ceased to be a member of the sterling area for the purposes of exchange control (Great Britain, report on the New Hebrides, biannual issue for 1969 & 1970: 25; Pick and Sédillot 1971: 180).
Other
Defaults on or restructurings of debt to the private sector (mainly from Purcell and Kaufman 1993 and Standard & Poor's 2004): None.
Banking crises (data since 1970s mainly from Caprio and Klingebiel 1999 and Frydl 1999): None, but a crisis involving the Vanuatu National Provident Fund in 1998 (Knapman 2001, v. 2: 273).
Frankel and Rose (1996) list of currency crashes: 1981.
No exchange rate data in Reinhart and Rogoff (2003).
After the Second World War, Australian currency was preferred to French and hoarded, apparently because people expected a devaluation of the French franc. In 1947 the problem became severe. French and British officials decided that only the Banque de l'Indochine should issue the New Hebrides franc and that the convertibility of he currency into Australian currency should be unlimited. These steps resolved the problem (Athy and van de Walle 2000: 32-3).
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.
Great Britain (United Kingdom). Gazette. 1665-present. Oxford Gazette (1996-1666); London Gazette (1666-present). Oxford (1665-1666); London (1666-present): His/Her Majesty's Stationery Office from 1903. Online at <http://www.gazettes.online.co.uk>; as of September 2005, gazettes since 1900 are available.
New Hebrides. Gazette. 1927-1980. Condominium des Nouvelles-Hébrides. New Hebrides Condominium. Journal officiel.Port Vila: no publisher?
Vanuatu. Gazette. 1980-present. Gazette (1927-1980); Vanuatu Gazette (Journal officiel) (1980-1990); Official Gazette (1990-present). Port Vila: no publisher?
--Publications of monetary authorities:
Central Bank of Vanuatu. Annual report. 1981-1988. Annual Report and Statement of Accounts for .... Port Vila: Central Bank of Vanuatu.
Central Bank of Vanuatu. Bulletin. 1986-1989. Quarterly Economic Bulletin. Port Vila: Central Bank of Vanuatu.
Commonwealth Bank of Australia. Annual report. 1912-1960. Aggregate Balance Sheet of the Commonwealth Bank of Australia (1912-1927); Balance Sheet of the Commonwealth Bank of Australia; and, Balance Sheet of the Commonwealth Savings Bank of Australia (1928-1941); Balance Sheet and Director's Report / Commonwealth Bank of Australia and Commonwealth Savings Bank of Australia (1942-1944); Report and Balance Sheets (1945-1959); Report and Financial Statements (1960). Sydney: Commonwealth Bank of Australia. (This report includes information about the Notes Issue Board during its existence from 1920-1924).
Commonwealth Bank of Australia. Bulletin. 1937-1959. Statistical Bulletin. Sydney: Commonwealth Bank of Australia.
Reserve Bank of Australia. Annual report. 1959/1960-present. Report and Financial Statements (1959/1960-1999); Annual Report (2000-present). Sydney: Reserve Bank of Australia.
Reserve Bank of Australia. Bulletin. 1960-present. Bulletin (1960-1981); Statistical Bulletin (1981-present). Sydney: Reserve Bank of Australia.
Reserve Bank of Vanuatu. Annual report. 1989-present. Annual Report and Statement of Accounts for .... Port Vila: Reserve Bank of Vanuatu.
Reserve Bank of Vanuatu. Bulletin. 1989-present. Quarterly Economic Review. Port Vila: Reserve Bank of Vanuatu.
--Web site of the current monetary authority (viewed January 2005):
<http://www.rbv.gov.vu>
--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.
Great Britain (United Kingdom). Report on the New Hebrides Condominium. 1948-1972. Colonial Office, Annual Report on New Hebrides Anglo-French Condominium for the Year … (1948-1964); Commonwealth Office, Annual Report on the New Hebrides Condominium for the Year … (1966-1967); Foreign and Commonwealth Office, Annual Report on the New Hebrides Condominium for the Year … (1967/1968-1971/1972). (This series was called Colonial Annual Reports.) London: His / Her Majesty's Stationery Office.
Main secondary sources:
Athy, Simeon, and Ferdie van de Walle, editors. 2000. 20 Years of Central Banking in Vanuatu. Port Vila: Reserve Bank of Vanuatu.
Bloch-Lainé, François, and others. 1956. La zone franc. Paris: Presses Universitaires de France.
Bourge, Georges. 1906. Les Nouvelles-Hébrides de 1606 à 1906; avec 16 photographies de MM. E. Mugnier et E. Michelon. Paris: A. Challamel.
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.)
Knapman, Bruce. 2001. Financial Sector Development in Pacific Island Economies, 2 v. Manila: Asian Development Bank.
Mazard, Jean. 1953. Histoire monétaire et numismatique des colonies et de l'Union française, 1670-1952. Paris: Émile Bourgey.
Meuleau, Marc. 1990. Des pionniers en Extrême-Orient: histoire de la Banque de l'Indochine (1875-1975). Paris: Librairie Arthème Fayard.
Schwan, C. Frederick and Joseph E. Boling. 1995. World War II Remembered: History in Your Hands--A Numismatic Study. Port Clinton, Ohio: BNR Press.
Shafer, Neil, and Colin R. Bruce II. 2000. Standard Catalog of World Paper Money, Volume 2: General Issues. Iola, Wisconsin: Krause Publications.
Skully, Michael T. 1987. Financial Institutions and Markets in the South Pacific: A Study of New Caledonia, Solomon Islands, Tonga, Vanuatu, and Western Samoa. New York: St. Martin's Press.
Monetary authorities: Vanuatu
| Dates | Type | Name | Source | Remarks |
| 1880s
-1894 |
free banking? alongside dollarization? | Compagnie Calédonienne (headquarters Noumea) alongside local franc (issued by Noumea, New Caledonia branch of Banque de l'Indochine [headquarters Paris, France]) alongside and pound sterling (issued by Bank of England [headquarters London, England]) | Pick and Sédillot (1971: 354) | Banque de l'Indochine (New Caledonia) notes were used from 1888, when the bank opened a branch in New Caledonia. |
| 1894
-1897 |
dollarization | New Caledonia local franc (issued by Noumea, New Caledonia branch of Banque de l'Indochine [headquarters Paris, France]) and pound sterling (issued by Bank of England [headquarters London, England]) | Pick and Sédillot (1971: 354) | The Compagnie Calédonienne ceased issuingnotes. |
| 1897
-unknown date from 1897-1908 |
free banking? alongside dollarization | Australian New Hebrides Company (headquarters Sydney, Australia) alongside local franc (issued by Noumea, New Caledonia branch of Banque de l'Indochine [headquarters Paris, France]) and pound sterling (issued by Bank of England [headquarters London, England]) | Pick and Sédillot (1971: 354) | Bourge (1906: 62) does not discuss the note issue of the Australian New Hebrides Company, but he observes that it was create in 1884 as a counterweight to a French colonial trading company, the Société Française des Nouvelles-Hébrides. Apparently it issued £1 and £5 notes, but information is scarce. |
| unknown date from
1897-1908
-24 August 1908 |
dollarization | New Caledonia local franc (issued by Noumea, New Caledonia branch of Banque de l'Indochine [headquarters Paris, France]) and pound sterling (issued by Bank of England [headquarters London, England]) | See Remarks | The Australian New Hebrides Company ceased issuing notes at a date unknown to me. |
| 25 August 1908
-1922? |
free banking? alongside dollarization | Société des Établissements Ballande (headquarters Noumea, New Caledonia) alongside local franc (issued by Noumea, New Caledonia branch of Banque de l'Indochine [headquarters Paris, France]) and pound sterling (issued by Bank of England [headquarters London, England]) | Mazard (1953: 84) [perhaps also cite Pierre Sanner, La monnaie et le crédit dans les territoires d'outre-mer, 1950, or Cahiers d'Outre-Mer, July-September 1949, p. 227, which Sanner cites] | The Société des Établissements Ballande issued notes. The Comptoir Français des Nouvelles-Hébrides issued 25-franc notes dated 22 August 1921 (Shafer and Bruce 2000: 849). I am uncertain what its relationship was to the Société des Établissements Ballande. |
| 1922?
-1930 |
free banking? alongside dollarization (another type) | Société des Établissements Ballande (headquarters Port Vila, Éfaté [Île Vaté], New Hebrides [now Vanuatu]) alongside local franc (issued by Noumea, New Caledonia branch of Banque de l'Indochine [headquarters Paris, France]) and Australian pound (issued by monetary institute [Australian] Notes Issue Board [headquarters Sydney, Australia] from 14 December 1920 / by central bank [with commercial banking functions] Commonwealth Bank of Australia [headquarters Sydney, Australia] from 10 October 1924) | Mazard (1953: 84); Pick and Sédillot (1971: 354) | Great Britain, report on the New Hebrides (1963 & 1964: 22) remarks that "For the past forty years Australian currency has been the de facto British currency and in 1935, by an Exchange of Notes [between the United Kingdom and France], it was recognised as valid in the [New Hebrides] Group for payments in sterling." |
| 1930
-31 August 1941 |
dollarization | local franc (issued by Noumea, New Caledonia branch of Banque de l'Indochine [headquarters Paris, France]) and Australian pound (issued by central bank [with commercial banking functions] Commonwealth Bank of Australia [headquarters Sydney, Australia]) | Mazard (1953: 84); Pick and Sédillot (1971: 354) | The Société des Établissements Ballande ceased issuing notes. |
| 1 September 1941
-31 March 1967 |
government issue (see Remarks) alongside dollarization | Free French section of condominium government of New Hebrides (headquarters Port Vila, Éfaté, New Hebrides [now Vanuatu) alongside Australian pound (issued by central bank [with commercial banking functions] Commonwealth Bank of Australia [headquarters Sydney, Australia] / Reserve Bank of Australia [headquarters Sydney, Australia] from 14 January 1960) | Free French high commissioner of New Caledonia, arrêté of 31 August 1941, cited in Bloch-Lainé and others (1956: 82); Great Britain, report on New Hebrides Condominium ( 1969 and 1970: 24-5) | After German forces conquered France during the Second World War, some colonies rallied to the Free French government in exile in London rather than the Vichy regime that collaborated with Germany. The New Hebrides was one such colony. Banque de l'Indochine notes overstamped by the Free French government and dated from 1941 to 1945 became the only authorized franc currency in the New Hebrides. The Services Nationaux Français des Nouvelles-Hébrides made a 1943 emergency issue of notes from 5-10,000 francs (Schwan and Boling 1995: 153). The New Hebrides franc was tied to the Australian pound and was backed, by Free French holdings of Australian dollar. If the backing was full, it presumably would have qualified as a currency board, but I have not found detailed information on the subject. In 1944, under the Anglo-French Financial Agreement, the New Hebrides were officially in the French franc zone, but for practical purposes part of the sterling area. The first bank was the Banque de l'Indochine (headquarters Paris, |
| 1 April 1967
-31 December 1980 |
joint monetary institute (but not part of a currency union) alongside dollarization | Institut d'Émission d'Outre-Mer (IEOM) (headquarters Paris, France) alongside Australian pound (issued by central bank Reserve Bank of Australia [headquarters Sydney, Australia]) | France, Law No. 66-948, 22 December 1966; Decree No. 67-267, 30 March 1967; Institut d'Émission d'Outre-Mer, annual report 1967: 11,80 | The French government replaced the old New Hebrides franc with a new note issue and a new monetary authority, already used by other French colonies. The second commercial bank was Australia and New Zealand Banking Corporation (ANZ) (headquarters Melbourne, Australia), in Port Vila, Éfaté, 23 March 1970 (Skully 1987: 215). The New Hebrides, as the islands were then called, issued their first coins in 1970. Notes denominated in New Hebrides francs and issued by the Institut d'Émission d'Outre-Mer, as well as Australian coins, ceased to be legal tender on 1 April 1983. |
| 1 January 1981
-present (2005) |
central bank | Central Bank of Vanuatu or Banque Centrale de Vanuatu or Central Bank Blong Vanuatu / Reserve Bank of Vanuatu or Reserve Bank Blong Vanuatu from 16 May 1989 (headquarters for both Port Vila, Éfaté, Vanuatu) | Vanuatu, Central Bank Act, No. 3 of 1981 (passed 18 December 1980), cited in Central Bank of Vanuatu 1981: 4 | Established a central bank because it was thought one would contribute to financial stability in the nation. Vanuatu joined the IMF on 28 September 1981. As a transitional arrangement, the Banque Indosuez Vanuatu, a subsidiary of a French bank and the main bank the government used, quoted exchange rates of the local currency against various foreign currencies. At the end of 1987, the central bank assumed all duties formerly performed by Banque Indosuez Vanuatu (Athy and van de Walle 2000: 39) |
Exchange rate arrangements: Vanuatu
| Dates | Official arrangement | Source | Unofficial arrangement, if different | Remarks |
| 1854
-10 February 1935 |
fixed; used French franc, local (New Caledonian) franc (from 1888) and pound sterling | initially, custom; later, France and United Kingdom, Joint Protocol of 6 August 1914 on the New Hebrides, published as France, decree of 27 May 1922 | Australian pounds also circulated. See the table for Australia on parallel market data for the Australian pound (later dollar). | European settlers came to the islands in 1854. By 1900, French colonial and British currency were already in use, although official authorization came only in 1914. Australian currency also circulated because at the time Australian £1 = UK£1. |
| 11 February 1935
-31 August 1941 |
fixed; used local (New Caledonian) franc, pound sterling, and Australian pound | France and United Kingdom, Joint Protocol of 11 February 1935 on the New Hebrides, cited in Athy and van de Walle (2000: 31) and Great Britain, report on the New Hebrides 1948: 23 | British and French Resident Commissioners were empowered to establish jointly the official internal exchange rates. Australian currency became legal tender. In 1931, Australia had devalued its currency to Australian £1.25 = UK£1. | |
| 1 September 1941
-21 February 1944 |
fixed; used Australian pound, alongside pegged; 141.30 New Hebrides francs = Australian £1 | Free French high commissioner of New Caledonia, arrêté of 31 August 1941, cited in Bloch-Lainé and others (1956: 82); Pick and Sédillot (1971: 180) | After Germany occupied France during the Second World War, confidence in French franc and franc-linked currency fell. The New Hebrides franc was issued by the Free French government, which rallied to its side France's colonies in the Pacific Ocean. New Hebrides francs and Australian pounds became the only legal tender. | |
| 22 February 1944
-25 December 1945 |
fixed; used Australian pound, and pegged; 160 New Hebrides francs = Australian £1 | 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 most of the overseas francs under Free French control (200 local francs = UK£1, or 50 local francs = US$1). The New Hebrides franc was correspondingly devalued. At the exchange rate listed, 200 New Hebrides francs = UK£1. | |
| 26 December 1945
-25 January 1948 |
fixed; used Australian pound, alongside pegged; 1 New Hebrides franc = 2.40 French francs, or 160 New Hebrides francs = Australian £1 | France, Decree No. 45-0136, 25 December 1945 | France devalued from 200 to 480 French francs = UK£1 and from 50 to 119.10669 French francs = US$1. The decree classified the New Hebrides as belonging to the currencies constituting the CFP franc group. The initial exchange rate of the CFP franc kept unchanged the cross rates with the pound sterling and US dollar. Because of frequent changes of the exchange rate of the French franc over the next few years, the Australian pound became the predominant currency in circulation at the time (Athy and van de Walle 2000: 31). | |
| 26 January 1948
-17 October 1948 |
fixed; used Australian pound, alongside pegged; 1 New Hebrides franc = 4.32 French francs, or 160 New Hebrides francs = Australian £1 | France, Ministry of Finance and Economic Affairs, Avis No. 291 de l'Office des Changes, 26 January 1946 | France devalued from 480 to 864 French francs = UK£1 and from 119.10669 to 214.39 French francs = US$1. The New Hebrides franc was revalued to offset the devaluation of the French franc. | |
| 18 October 1948
-26 April 1949 |
fixed; used Australian pound, alongside pegged; 1 New Hebrides franc = 5.31 French francs, or 160 New Hebrides francs = Australian £1 | France, Ministry of Finance and Economic Affairs, Avis No. 352 de l'Office des Changes, 17 October 1948 | France devalued from 864 to 1,062 French francs = UK£1 and from 214.39 to 263.50 French francs = US$1. The New Hebrides franc was revalued to offset the devaluation of the French franc. | |
| 27 April 1949
-19 September 1949 |
fixed; used Australian pound, alongside pegged; 1 New Hebrides franc = 5.48 French francs, or 160 New Hebrides francs = Australian £1 | apparently France, Ministry of Finance and Economic Affairs, Avis No. 391 de l'Office des Changes, 27 April 1949 | France devalued from 1,062 to 1,097 French francs = UK£1 and from 263.50 to 272 French francs = US$1. The New Hebrides franc was revalued to offset the devaluation of the French franc. | |
| 20 September 1949
-3 October 1949 |
fixed; used Australian pound, alongside pegged; 1 New Hebrides franc = 5.50 French francs, or apparently still 160 New Hebrides francs = Australian £1 | France, Ministry of Finance and Economic Affairs, Avis No. 421 de l'Office des Changes, 20 September 1949 | Following the devaluation of the pound sterling on 18 September 1949, France revalued to 980 French francs = UK£1 but devalued to 350 French francs = US$1. The New Hebrides franc was simply revalued slightly to make the exchange rate against the French franc a round number, and apparently the previous exchange rate against the Australian pound remained in force. | |
| 4 October 1949
-22 September 1957 |
fixed; used Australian pound, alongside pegged; New Hebrides franc = 5.50 French francs, or 142.40 New Hebrides francs = Australian £1 | Great Britain, report on the New Hebrides Condominium, 1957 and 1958: 19 | A delayed reaction to the devaluation of the pound sterling and sterling area currencies such as the Australian dollar. | |
| 23 September 1957
-January 1959 |
fixed; used Australian pound, alongside pegged; 1 New Hebrides franc = 5.50 French francs, or 171 New Hebrides francs = Australian £1 | Great Britain, report on the New Hebrides Condominium, 1957 and 1958: 19 | On 10 August 1957, France devalued from 980 to 1,176 French francs per pound sterling. | |
| January 1959
-31 December 1959 |
fixed; used Australian pound, alongside pegged; 1 New Hebrides franc = 5.50 French franc, or 200 New Hebrides francs = Australian £1 | On 27 December 1958, France devalued from 420 to 493.706 French francs per US dollar. The rate of 200 New Hebrides franc = Australian £1 was a convenient whole number near to the precise rate for the French franc. | ||
| 1 January 1960
-12 February 1966 |
fixed; used Australian pound, alongside pegged; 1 New Hebrides franc = 0.055 (new) French franc, or 200 New Hebrides francs = Australian £1 | consequence of 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; Great Britain, report on the New Hebrides Condominium, 1963 and 1964: 23 | France redenominated its currency at 1 new French franc = 100 old French francs. | |
| 14 February 1966
-9 August 1969 |
pegged; 1 New Hebrides franc = 0.055 French franc, or 100 New Hebrides francs = Australian $1 | Reserve Bank of Australia annual report, 30 June 1966: 27 | Australia introduced the decimalized Australian dollar to replace the Australian pound at Australian $2 = Australian £1. From this time forward, Australian currency became increasingly less used (Athy and van de Walle 2000: 60). Accordingly, I cease to mention it. | |
| 10 August 1969
22 December 1972 |
pegged; 1 New Hebrides franc = 0.061875 French franc, or 100 New Hebrides francs = Australian $1 | Institut d'Émission d'Outre-Mer annual report 1969: 85 | Market rate of New Hebrides franc to Australian dollar was at a discount to official rate August-December 1971 (Institut d'Émission d'Outre-Mer annual report 1971: 95). | Did not follow the devaluation of the French franc. The market rate of the New Hebrides franc went to a discount compared to the official rate after France established a dual exchange rate in August 1971, but it disappeared after the Smithsonian Agreement of December 1971. |
| 23 December 1972
-20 December 1973 |
pegged; official rate 1 New Hebrides franc = 0.061875 French franc, or 100 New Hebrides francs = Australian $1 | Great Britain, report on New Hebrides Condominium, 1971and 1972: 14 | market rate 105 New Hebrides francs = Australian $1 (Great Britain, report on New Hebrides Condominium, 1971 and 1972: 14) | Traders altered the exchange rate when Australia devalued on 23 December 1972. |
| 21 December 1973
-31 December 1980 |
pegged; 1 New Hebrides franc = 0.061875 French franc and rates with Australian dollar as shown in Remarks | Institut d'Émission d'Outre-Mer annual report 1974, section on New Hebrides: 25; annual report 1979, section on New Hebrides: 29 | During this period, the exchange rate of the Australian dollar changed frequently as the Australian government frequently altered its exchange rate. The official exchange rates, in terms of New Hebrides francs per Australian dollar, were as follows: 21 December 1973: 105.25; 28 May 1973: 100; 5 July 1973, 95.25; 23 August 1973, 100; 14 January 1974, 117.65; 4 February 1974, 125.00; 12 February 1974, 120.50; 26 February 1974, 114.95; 21 June 1974, 119.05; 22 July 1974, 114.95; 25 September 1974, 100; 24 December 1974, 97.10; 24 January 1975, 94.34; 23 May 1975, 86.96; 24 July 1975, 90.90; 19 March 1976, 95.24; 22 July 1976, 100; 29 November 1976, 83.33; 24 December 1976, 86.96; 16 March 1977, 88.50; 5 August 1977, 86.96; 13 February 1978, 90.09; 21 March 1978, 84.75; 10 August 1978, 80.00; 11 June 1979, 78.13; 9 July 1979, 76.92; 24 September 1979, 74.07; 23 November 1979, 71.43. After that, the IEOM annual reports list no more data. | |
| 1 January 1981
-9 September 1981 |
pegged; 1 Vanuatu vatu = 0.061875 French franc; Australian dollar also circulated | Vanuatu, Monetary Reform Statement of the Minister of Finance, 16 December 1980, cited in Central Bank of Vanuatu annual report 1981: 5 | The New Hebrides franc was renamed the vatu. The name of the currency comes from a word in the local language for "stone," which was used as a kind of currency on some Pacific Islands before European colonization. | |
| 10 September 1981
-31 March 1983 |
pegged to rigid basket; 106.20 Vanuatu vatu = 1 SDR; Australian dollar also circulated | Vanuatu, government announcement of 9 September 1981, cited in Central Bank of Vanuatu annual report 1981: 7 | Switched to the SDR as the anchor to reduce swings against particular foreign currencies, especially the Australian dollar. The Australian dollar was the intervention currency, and the central bank periodically changed its quotation for the Australian dollar. On 22 March 1982 the central bank began issuing vatu notes to replace the existing currencies in circulation, including the New Hebrides franc and the Australian dollar. | |
| 1 April 1983
-11 March 1984 |
pegged to rigid basket; 106.20 Vanuatu vatu = 1 SDR | Central Bank of Vanuatu, announcement of 3 December 1982, cited in Central Bank of Vanuatu annual report 1982: 5 | On 3 December 1982 the central bank informed commercial banks that from 1 April 1983, New Hebrides franc notes would cease to be legal tender, the Australian dollar would no longer be considered officially as circulating currency in Vanuatu and the central bank would cease setting exchange rates against the Australian dollar that remained unchanged for months at a time. | |
| 12 March 1984
-31 March 1985 |
pegged to rigid basket; 100.60 Vanuatu vatu = 1 SDR | Central Bank of Vanuatu annual report 1984: 7 | Revalued; the reason is obscure. | |
| 1 April 1985
-12 February 1986 |
pegged to rigid basket; 110 Vanuatu vatu = 1 SDR | Central Bank of Vanuatu annual report 1985: 8 | Devalued. | |
| 13 February 1986
-22 October 1986 |
pegged to rigid basket; 122 Vanuatu vatu = 1 SDR | Central Bank of Vanuatu annual report 1986: 8 | Devalued to reverse the appreciation of the vatu against the Australian, New Zealand, and US dollars. | |
| 23 October 1986
-4 February 1988 |
pegged to rigid basket; 142 Vanuatu vatu = 1 SDR | Vanuatu, Minister of Housing and Finance, statement of 5 February 1988; Central Bank of Vanuatu, decision of 5 February 1988, both cited in Central Bank of Vanuatu bulletin, March 1988: 15 | Devalued to reverse the appreciation of the vatu against the Australian, New Zealand, and US dollars. | |
| 5 February 1988
-present (2005) |
flexible basket (IMF: conventional peg [to basket] from 1998, when the category began) | Vanuatu, Minister of Housing and Finance, statement of 5 February 1988; Central Bank of Vanuatu, decision of 5 February 1988, both cited in Central Bank of Vanuatu bulletin, March 1988: 15 | Replaced the peg to the SDR with a transactions-weighted basket whose composition the central bank did not disclose. The change, whose purpose was to curb "speculative elements," took effect at the close of business on 5 February 1988. The US dollar was the intervention currency. In 1998 the government let the currency depreciate after January riots in Port Vila, which resulted from an obudsman's report questioning the soundness of investments at the Vanuatu National Provident Fund. The government allowed unconditional withdrawal of savings at the fund and paid the shortfall itself. The resulting increase in the money supply put pressure on the exchange rate (Knapman 2001, v. 2: 273). |