Political sketch
An overseas territory of France.
Futuna was probably settled late in the 1st millennium B.C. The first Europeans to visit the islands were members of a Dutch expedition in 1616, who named Futuna and Alofi the Hoorn (Horne) Islands. The English captain Samuel Wallis found the island of Uvea in 1767, and it is named after him. Wallis became a French protectorate in 1887 and Futuna followed in 1888. The islands were originally part of the French colony of Oceania. During the Second World War, they sided with the Free French government in exile on 2 September 1940. French Polynesia was far from the front lines in the Second World War. In 1959 the islanders voted to become an overseas territory of France. An elected territorial assembly exists; there are also three traditional kings with limited powers. Wallis an Futuna also elects one member of the French National Assembly and one member of the French Senate. The economy is based mainly on subsistence agriculture; tourism is limited because of their remoteness.
Wars since 1500
None.
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 A law of 25 June 1928 officially restored the gold standard and repealed exchange controls.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, after the Second World War broke out in Europe. On 20 May 1940, capital controls within the franc zone were greatly relaxed by a French decree of that date. France's Pacific Ocean territories switched allegiance to the Free French government in exile in late 1940; see below for a description of what followed. Communications with metropolitan France were restored in September 1944, by which time the Allies had liberated Paris and the main French port cities. For legal purposes, France, arrêté of 18 December 1945 set the period of interruption of communications between France and its colonies as lasting from 5 November 1942-31 December 1944. 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.
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.
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.
Frankel and Rose (1996) list of currency crashes: Country not listed.
No exchange rate data in Reinhart and Rogoff (2003).
References
Primary sources:
--Laws and decrees:
European Community. Gazette. 1968-2003. Journal officiel des Communautés européenne. Législation (English version from 1973 Official Journal of the European Communities. Legislation). Luxembourg: Office des Publications Officielles des Communautés (in English, Office for Official Publications of the European Communities).
European Union. Gazette. 2003-present. Official Journal of the European Union. Luxembourg : Office for Official Publications of the European Communities. Accessible through Eur-Lex portal to European law, <http://europa.eu.int/eur-lex/en/>, viewed 23 October 2005.
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 Polynesia. Gazette. 1852-present. Messager de Tahiti (1852-1883); Journal officiel des établissements français de l'Océanie (1883-1901); Journal official de la Polynésie Française (1901-present). Papeete: Imprimerie du Gouvernement.
French Polynesia. Service des Archives Territoriales. 1994. Répertoire général des textes promulgués au B.O.E.F.O. et J.O.P.F. de 1843 à 1993. [Papeete]: Service des Archives Territoriales de la Polynésie française.
Wallis and Futuna. 1962?-present. Journal officiel du Territoire des Îles Wallis et Futuna (1962?-1978?); Journal officiel de Wallis et Futuna (1979?-present). Matu-Utu?
--Publications of monetary authorities:
Banque de l'Indochine. Annual report. 1875-1967. Assemblée générale. Paris: Banque de l'Indochine.
Banque de l'Indochine. Bulletin. Service des Études Économiques. 1931-? Bulletin mensuel d'information. Paris: Banque de l'Indochine.
IEOM. Institut d'Émission d'Outre-Mer. Annual report. 1967-present. Rapport d'activité (1967-1991); Rapport annuel (1992-present). Paris: Institut d'Émission d'Outre-Mer. From 1973 the annual report was divided into a general report and a separate report for each territory in which the organization operated.
IEOM. Institut d'Émission d'Outre-Mer. Annual report (branch). 1973-present. Rapport d'activité Îles Wallis et Futuna (1973-1991); Rapport annuel Wallis-et-Futuna (1992-present). Paris: Institut d'Émission d'Outre-Mer.
IEOM. Institut d'Émission d'Outre-Mer. Bulletin. 1967?-present. Bulletin trimestriel de conjoncture. Paris: Institut d'Émission d'Outre-Mer.
IEOM. Institut d'Émission d'Outre-Mer. Bulletin (branch). 1974-present. Bulletin trimestriel de conjoncture, Wallis-et-Futuna. Paris: Institut d'Émission d'Outre-Mer.
--Web site of the current monetary authority (viewed January 2005):
<http://www.ieom.fr>
--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:
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.) (No direct information on Wallis and Futuna, but some information can be inferred from data on France.)
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.
Monetary authorities: Wallis and Futuna
| Dates | Type | Name | Source | Remarks |
| 5 December 1905 (in
Tahiti)
-31 March 1967 |
private monopoly issue (as part of a currency union) | Banque de l'Indochine (headquarters Paris, France) | France, decree of 21 January 1875 chartering bank; law of 31 March 1931 extending bank's term of note issuance; Meuleau 1990: 290 | The bank opened a branch in Papeete, Tahiti. The first coins were issued in 1949, for the Établissements Françaises de l'Océanie (French Polynesia and Wallis and Futuna). Perhaps before the Second World War, the French post office, which provided postal savings accounts, opened an office. Sometime after the Second World War, the Caisse Centrale de Coopération Économique (CCCE) (headquarters Paris, France) opened a branch that conducted some financial transactions. |
| 1 April 1967
-present (2005) |
joint monetary institute (as part of a currency union) | Institut d'Émission, d'Outre-Mer (IEOM) (headquarters Paris, France) | France, Law No. 66-948, 22 December 1966; Decree No. 67-121, 10 February 1967; Decree No. 67-267, 30 March 1967 | A monetary institute replaced note issuance by Banque de l'Indochine long after the bank had yielded it elsewhere. The Banque de l'Indochine et de Suez, as it was then called, opened a branch in Mata-Utu, Uvéa, on 25 July 1977, but closed it in 1989, leaving Wallis and Futuna bankless, but the Banque du Wallis et Futuna (headquarters Mata-Utu, Uvéa opened in Mata-Utu in 1991 (Institut d'Émission, d'Outre-Mer annual report 1991, section on Wallis and Futuna: 7). |
Exchange rate arrangements: Wallis and Futuna
| Dates | Official arrangement | Source | Unofficial arrangement, if different | Remarks |
| 1 April 1867?
-4 December 1905 |
fixed; used French franc | France, Commandant des Établissements français de l'Océanie, arrêté of 31 March 1867, cited in Mazard (1953: 77) | This arrêté established the French 5-franc piece as the monetary standard and declared it equal to the Spanish silver dollar (peso fuerte). An arrêté of 24 October 1879 declared that beginning 1 February 1880, government offices would accept only French coins and that foreign coins would be subject to import duties (Mazard 1953: 77). In 1908, the government demonetized all foreign coins (French Oceania, governor's decree of 17 January 1908, cited in Mazard 1953: 80). | |
| 5 December 1905
-September 1940 |
pegged; 1 "local" franc (notes issued by Banque de l'Indonchine, which had no local branch) = 1 French franc | France, decree of 21 January 1875 chartering bank; law of 31 March 1931 extending bank's term of note issuance; Meuleau 1990: 290 | The Bank de l'Indochine opened a branch in Papeete, Tahiti, quite far away from Wallis and Futuna, but at the time all were under a common colonial government. | |
| September 1940
-7 February 1944 |
pegged; 176.625 local francs = UKŁ1 (and later 43.80 local francs = US$1) | Anglo-Free French agreement of 19 March 1941, cited in Mazard (1953: 105) | French Polynesia and Wallis and Futuna switched support to the Free French government-in-exile in London during the Second World War. The Anglo-Free French agreement preserved the prewar exchange rate of the French franc with the pound sterling (and later with the US dollar, when the United States entered the Second World War). The colonial government issued small notes during the Second World War. | |
| 8 February 1944
-5 December 1944 |
pegged; 200 local francs = UKŁ1, or 50 local francs = US$1 | Anglo-Free French agreement of 8 February 1944, cited in Mazard (1953: 106) | The Anglo-French agreement devalued the French franc slightly to the level already prevailing in other territories under Free French control. | |
| 6 December 1944
-25 December 1945 |
pegged; 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. Doing so in effect restored the French franc as the anchor currency. | |
| 26 December 1945
-25 January 1948 |
pegged (as part of a currency union); 1 CFP franc = 2.40 French francs | France, Decree No. 45-0136, 25 December 1945 | The CFP franc was created when France devalued from 200 to 480 French francs = UKŁ1 and from 50 to 119.10669 French francs = US$1. The initial exchange rate of the CFP franc kept unchanged the cross rates with the pound sterling and US dollar. "CFP" stands for Colonies Françaises du Pacifique (French Pacific Colonies). | |
| 26 January 1948
-17 October 1948 |
pegged (as part of a currency union); 1 CFP franc = 4.32 French francs | 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 = UKŁ1 and from 119.10669 to 214.39 French francs = US$1. The CFP franc was revalued to offset the devaluation of the French franc. | |
| 18 October 1948
-26 April 1949 |
pegged (as part of a currency union); 1 CFP franc = 5.31 French francs | 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 = UKŁ1 and from 214.39 to 263.50 French francs = US$1. The CFP franc was revalued to offset the devaluation of the French franc. | |
| 27 April 1949
-19 September 1949 |
pegged (as part of a currency union); 1 CFP franc = 5.48 French francs | 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 = UKŁ1 and from 263.50 to 272 French francs = US$1. The CFP franc was revalued to offset the devaluation of the French franc. | |
| 20 September 1949
-31 December 1959 |
pegged (as part of a currency union); 1 CFP franc = 5.50 French francs | 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 = UKŁ1 but devalued to 350 French francs = US$1. The CFP franc was not revalued to offset the devaluation of the French franc; rather, it was simply revalued slightly to make the exchange rate a round number. | |
| 1 January 1960
-20 August 1971 |
pegged (as part of a currency union); 1 CFP franc = 0.055 (new) French franc | 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 | France redenominated its currency at 1 new French franc = 100 old French francs. | |
| 21 August 1971
-20 March 1974 |
pegged (as part of a currency union), dual rate; official rate 1 CFP franc = 0.055 French franc | France, Ministry of Economy and Finance, Circulaire du 20 août 1971 relative à l'exécution des transferts à destination de l'étranger, 20 August 1971 | The second rate, called the financial rate, was a managed or perhaps independent float. | France established a dual exchange rate for itself and its territories other than Djibouti. |
| 21 March 1974
-31 December 1998 |
pegged (as part of a currency union); 1 CFP franc = 0.055 French franc | France, Ministry of Economy and Finance, Circulaire du 20 mars 1974 relative à l'exécution des transferts entre la France et l'étranger sur le marché officiel des changes, 20 March 1974 | France eliminated the dual exchange rate. | |
| 1 January 1999
-present (2005) |
pegged (as part of a currency union); 1 CFP franc = 0.00838 European euro, or 1,000 CFP francs = 8.38 European euros | France, Decree No. 98-1152, 16 December 1998; arrêté of 31 December 1998, NOR ECOT9820119A | The CFP franc was fixed to the European euro by using the cross rate of 6.55957 French francs per European euro and rounding the amount of 1,000 CFP francs to the nearest European euro cent. |