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Зона Франка Кфа: Стабильность Для Кого? Отраслевое Распределение Последствий Привязки Франка Кфа К Евро В Waemu И Cemac Валютная Подверженность Импорта И Экспорта
[The CFA Franc Zone: Stability for Whom? The Sectoral Incidence of the CFA–Euro Peg in WAEMU and CEMAC Exchange-Rate Exposure of Imports and Exports]

Author

Listed:
  • Salouo-Mvondo, Armand

Abstract

The CFA franc arrangements are routinely described as stable because both CFA francs—the franc of the African Financial Community (franc de la Communauté financière africaine) for WAEMU and the franc of Financial Cooperation in Central Africa (franc de la Coopération financière en Afrique centrale) for CEMAC—maintain a fixed parity against the euro. Bilateral stability against the euro does not automatically translate into multilateral stability against the full set of trading-partner currencies — a result already established at the aggregate level for WAEMU and CEMAC over 2001–2024, with a euro/SDR volatility ratio of roughly 2.00 for WAEMU and 3.05 for CEMAC (Salouo-Mvondo, 2026). This paper asks how that difference is distributed across countries, industries, imports and exports. It constructs industry-specific nominal effective exchange-rate indices for 1,236 HS4 positions using BACI HS96 trade data, three-year predetermined sectoral weights, and the harmonised exchange-rate infrastructure described in Salouo-Mvondo (2026). In the baseline specification, the trade-weighted median euro/SDR volatility ratio is 2.038 for CEMAC exports, 1.242 for CEMAC imports, 1.139 for WAEMU exports and 1.126 for WAEMU imports. Most trade value lies in sectors whose ratio exceeds one. These four medians are unchanged to three decimals, except for WAEMU imports (1.122), in the strict high-confidence sample. A higher euro-area trade share is associated with lower relative volatility: a ten-percentage-point increase corresponds to an estimated 22.6 per cent decline in the ratio, in a regression interpreted as a quantitative validation of the composition mechanism rather than an independent causal design. The results reveal substantial national and sectoral heterogeneity. Hydrocarbons magnify CEMAC export exposure but do not generate the result on their own. The main uncertainty concerns invoicing currencies: stylised dollar scenarios raise the ratios and must be interpreted as sensitivity bounds. The conclusion is deliberately narrow: the parity is common, but the nominal protection it provides is not.

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References listed on IDEAS

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  1. Gita Gopinath & Emine Boz & Camila Casas & Federico J. Díez & Pierre-Olivier Gourinchas & Mikkel Plagborg-Møller, 2020. "Dominant Currency Paradigm," American Economic Review, American Economic Association, vol. 110(3), pages 677-719, March.
  2. Sato, Kiyotaka & Shimizu, Junko & Shrestha, Nagendra & Zhang, Shajuan, 2020. "New empirical assessment of export price competitiveness: Industry-specific real effective exchange rates in Asia," The North American Journal of Economics and Finance, Elsevier, vol. 54(C).
  3. Boz, Emine & Casas, Camila & Georgiadis, Georgios & Gopinath, Gita & Le Mezo, Helena & Mehl, Arnaud & Nguyen, Tra, 2022. "Patterns of invoicing currency in global trade: New evidence," Journal of International Economics, Elsevier, vol. 136(C).
  4. Kiyotaka Sato & Junko Shimizu & Nagendra Shrestha & Shajuan Zhang, 2013. "Industry-specific Real Effective Exchange Rates and Export Price Competitiveness: The Cases of Japan, China, and Korea," Asian Economic Policy Review, Japan Center for Economic Research, vol. 8(2), pages 298-321, December.
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JEL classification:

  • F14 - International Economics - - Trade - - - Empirical Studies of Trade
  • F31 - International Economics - - International Finance - - - Foreign Exchange
  • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
  • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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