Gray, S., & Pongsaparn, R. (2015). Issuance of Central Bank Securities: International Experiences and Guidelines, IMF Working Paper (IMF/15/106).
International Monetary Fund (2015). Evolving Monetary Policy Frameworks in Low Income and Other Developing Economies. Staff Report.
Prepared by Liam O’Sullivan. This chapter has benefited from comments and inputs from various departments at the BCC, and several IMF colleagues.
In 1979, Comoros signed a monetary cooperation agreement with France, making the Comoros part of the franc zone which also includes the CFA franc zone (the West African Economic and Monetary Union (WAEMU) and the Central African Economic and Monetary Union (CEMAC) where the CFA franc is used). The monetary regime is similar to that of the CFA franc zone, with the following principles (i) the French Treasury guarantees without limits the convertibility of the franc zone; (ii) the currencies are convertible at a fixed exchange into Euro (before French francs); and (iii) the zone members must pool together a minimum of 50 percent of their international reserves, corresponding to 20 percent of the monetary base of each central bank, into an operations account at the French Treasury. The exchange rate of the Comorian franc to the French franc (now euro) has differed from that for the CFA franc since 1994.
The parity, in effect since the 1994 devaluation, is KMF 493 per euro. The institutional background is described in Gulde and Tsangarides (eds., 2008).
The sharp increase in level of excess reserves in Cabo Verde and Sao Tome and Principe since 2015 is due to increasing risk aversion on the part of commercial banks in response to high levels of non-performing loans (as well as exceptional levels of migrant deposits in the case of Cabo Verde).