The Bank of Central African States (BEAC) has publicly dismissed rumors of a possible devaluation of the CFA franc in the Cemac region, saying no such decision is under consideration despite a more challenging economic environment and declining foreign exchange reserves.
In a Jan. 16 statement, the central bank said speculation circulating in recent days was “unfounded” and not based on any economic rationale or institutional decision. The BEAC stressed that the CFA franc remains stable and fully convertible, supported by monetary cooperation with France and what it described as “adequate” foreign exchange reserves.
“Our currency, guaranteed by cooperation with France and backed by adequate foreign exchange reserves, remains stable and convertible. The economic fundamentals of Cemac, while facing challenges, do not in any way justify such a measure,” the BEAC said, adding that “no devaluation of the CFA franc is on the agenda.”
The BEAC also reiterated its policy priorities, including maintaining price stability, preserving foreign exchange reserves, and supervising a “sound and resilient” financial system. The message is intended to anchor expectations at a time when markets and economic agents remain highly sensitive to any signal related to the exchange rate regime.
Foreign exchange reserves under pressure
On reserves, a key pillar of monetary stability, the BEAC projects a 2.6% decline by the end of 2025 to CFA6,377.3 billion, according to its latest forecasts. This level would represent import coverage of about 4.2 months, down from 4.9 months a year earlier. The erosion has prompted the central bank to tighten monetary conditions to protect the CFA franc peg and support the rebuilding of reserves.
The broader macroeconomic environment is also becoming more demanding. Economic growth in the Cemac region is expected to slow to 2.4% this year from 2.7% in 2024, largely due to a contraction in oil sector activity. While the BEAC argues that fundamentals remain strong enough to rule out devaluation, it acknowledges that they require increased vigilance over external balances.
The last devaluation of the CFA franc took place in January 1994, when the currency was cut by 50%, with the exchange rate moving from 50 to 100 CFA francs per French franc. The move was aimed at correcting overvaluation that was hurting exports and constraining growth, in order to restore competitiveness and revive economic activity across the zone.
Created on December 26, 1945, under the name “franc des colonies françaises d’Afrique,” the CFA franc has undergone several changes. In 1958, it became the “franc de la Communauté française d’Afrique,” before taking its current names: the “franc de la Communauté financière africaine” for countries of the West African Economic and Monetary Union (WAEMU), and the “franc de la Coopération financière en Afrique centrale” for Cemac member states. While issued by separate central banks — the BCEAO for West Africa — both currencies retain the same convertibility and fixed parity with the euro, guaranteed by France.
