Online Encyclopedia
Franc
The franc is the name of several currency units. The name is said to derive from the Latin inscription francorum rex ("King of the Franks") on early French coins, or from the French franc, meaning "free".
| Franc | |
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| 1 Swiss franc 1983 | |
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| 1 French franc 1991 | |
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| 1 Belgian franc 1996 | |
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| 1 Luxembourg franc 1990 | |
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| 1 Monaco franc 1978 | |
Countries which use francs include Switzerland and most of the Francophone countries of Africa. Before the introduction of the euro, francs were also used in France, Belgium and Luxembourg, while Andorra and Monaco accepted the French franc as legal tender. One franc is typically divided into 100 centimes.
The French franc symbol is an F with a line through it (₣).
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Origins
The franc was originally a French gold coin of 3.87 g minted in 1360 on the occasion of the release of King John II ("the good"), held by the English since his capture at the Battle of Poitiers four years earlier. It was equivalent to one livre tournois (Tours pound).
French franc
Though abolished as a legal coin by Louis XIII in 1641 in favor of the gold louis or ecu, the term franc continued to be used in common parlance for the livre.
French Revolution
The franc was re-established as the national currency by the French Revolutionary Convention in 1795 as a decimal unit of 4.5 g of fine silver (theoretically slightly less than the livre of 4.505 g, though the new coin was set in 1796 at 1.0125 livres, reflecting in part the past minting of sub-standard coin).
With the creation of a gold franc in 1803, gold and silver-based units circulated interchangeably on the basis of a 1:15.1 ratio between the values of the two metals (bimetallism).
World War I
World War I severely undermined the French franc's strength, as war expenditure, inflation and postwar reconstruction financed partly through the printing of ever more money reduced the franc's purchasing power by 70 per cent from 1915 to 1920 and a further 43 per cent from 1922 to 1926. After a brief return to the gold standard (1928 to 1936) the currency was allowed to resume its slide, until it was worth in 1959 less than a fortieth of its 1936 value.
The new franc
In January 1960 the French franc was revalued at 100 existing francs. Old franc pieces continued to circulate as centimes (none of which were minted for the first two years), 100 of them making a nouveau franc (the abbreviation NF was used for some time). Inflation continued to erode the currency's value but at a greatly reduced rate comparable to other countries, so when the euro replaced the franc in January 1, 1999, the new franc was worth less than an eighth of its original value.
Many French people continued using old francs, anciens francs as a unit; large sums such as lottery prizes were often given in centimes, since these are equivalent to the old franc. This usage continued right up to when franc notes and coins were withdrawn in 2002, with speculation as to whether older people would carry the factor of 100 conversion through to the euro, the scaled-down version being called, naturally, the euro ancien.
From January 1, 1999, the value exchange rate of the French franc against the euro was set at a fix parity of 1 EUR=6.55957 FRF. Euro coins and notes replaced it entirely between January 1 and February 17, 2002.
CFA and CFP francs
Fourteen African countries use the franc CFA (in west Africa, Communauté financière africaine; in equatorial Africa, Coopération financière en Afrique centrale), originally (1945) worth 1.7 French francs and then from 1948, 2 francs (from 1960: 0.02 new franc) but after January 1994 worth only 0.01 French franc. Therefore, from January 1999, 1 CFA franc is equivalent to 0.00152449 euro.
A separate (franc CFP) circulates in France's Pacific territories, worth 0.0084 euro (formerly 0.055 French franc).
Belgian and Luxembourg francs
The conquest of most of western Europe by Revolutionary and Napoleonic France led to the franc's wide circulation. Following independence from the Kingdom of the Netherlands, the new Kingdom of Belgium in 1832 adopted its own franc, equivalent to the French one, followed by Luxembourg in 1848 and Switzerland in 1850. Newly-unified Italy adopted the lira on a similar basis in 1862.
In 1865 France, Belgium, Switzerland and Italy created the Latin Monetary Union (to be joined by Greece in 1868): each would possess a national currency unit (franc, lira, drachma) worth 4.5 g of silver or 0.290 322 g of gold (fine), all freely exchangeable at a rate of 1:1. In the 1870s the gold value was made the fixed standard, a situation which was to continue until 1914.
In 1926 Belgium as well as France experienced depreciation and an abrupt collapse of confidence, leading to the introduction of a new gold currency for international transactions, the belga of 5 francs, and the country's withdrawal from the monetary union, which ceased to exist at the end of the year. The 1921 monetary union of Belgium and Luxembourg survived, however, forming the basis for full economic union in 1932.
Like the French franc, the Belgian/Luxemburgese franc ceased to exist in January 1, 1999, when it became fixed at 1 EUR= 40.3399 BEF/LUF, thus a franc was worth 0.024789 €. Old franc coins and notes lost its legal tender status in February 28, 2002.
1 Luxembourg franc was equal to 1 Belgian franc. Belgian francs were legal tender inside Luxembourg and Luxembourg francs were legal tender in Belgium.
The equivalent name of the Belgian franc in Dutch, Belgium's other official language, was "Belgische Frank."
Swiss franc
The Swiss franc (ISO code: CHF or 756), which appreciated significantly against the new European currency from April to September 2000, remains one of the world's strongest currencies, worth today around two-thirds of a euro. The Swiss franc is used in Switzerland and in Liechtenstein.
The name of the country "Swiss Confederation" is found on some of the coins in Latin (Confoederatio Helvetica), to preserve neutrality among linguistic communities.
Congolese franc
The Congolese Franc is used in the Democratic Republic of Congo. Suppressed in 1967 by Mobutu, it was re-established in 1998 by Laurent Kabila.
Burundi franc
Used in Burundi.
Rwandan franc
Used in Rwanda.
Djiboutian franc
Used in Djibouti. Pegged to the US dollar since 1973.
Guinean franc
Used in Guinea. Suppressed in 1972 by dictator Sékou Touré, re-established in 1986 by his successor Lansana Conté.
Malagasy franc
Used in Madagascar. The Malagasy franc is scheduled to disappear by the end of 2004, replaced by the more national sounding Ariary. This controversial decision was taken by the new president of Madagascar Marc Ravalomanana.
See also
- CFA Franc
- CFP Franc
- Burundi Franc
- Cape Verdean Escudo
- Comoran Franc
- Congolese Franc
- Djiboutian Franc
- Malagasy Franc
- Rwandan Franc
- Swiss Franc
- Special settlement currencies
- Livre tournois (French pound)
- Roman currency
External links
- Swiss Franc Tracker - CHF http://www.cashfollow.ch/