The monetary system in Tahiti is quite different from the one we know in Europe. Indeed, the currency used on the island is the Pacific Franc (CFP), which is common to several territories in the region, such as New Caledonia and Wallis and Futuna. This currency is managed by the IEOM (Institut d’mission d’outre-mer), which guarantees its stability and its rate in relation to the euro. But how is the circulation of this currency on Polynesian territory and how can we possibly use it today?
First of all, you should know that the CFP is used daily in Tahiti to pay for groceries, small purchases and public transport. It is therefore common currency, but it is also possible to use euros, provided you change them to CFP upstream. Indeed, there are no ATMs in all areas of the island, so it is important to provide your change before leaving.
The value of the Pacific Franc is fixed in relation to the euro, at the rate of 1 euro for 119.33 CFP. This currency has known stability since its creation in 1945, although it underwent a slight adjustment at the end of the 1990s. different for easy identification.
If you want to know more about the functioning of the Tahitian monetary system, you can consult the site where-and-when.net, which offers a comprehensive analysis of this topic. In any case, it is important to understand how the local currency works if you go to Tahiti, in order to avoid surprises and disappointments during your transactions. And if you need to change euros into CFP, know that it is possible to do so at the airport or in the exchange offices on the island.
French Polynesia is an overseas territory located in the Pacific Ocean, made up of five archipelagos, the Leeward Islands, the Windward Islands, the Tuamotus, the Gambiers and the Australs. Tahiti, the largest island in French Polynesia, is the best known. The islands of New Caledonia are also part of this territory. The currency in circulation in French Polynesia is the Pacific franc (CFP franc). In this article, we will understand the monetary system in Tahiti by focusing on the Polynesian currency CFP franc.
The monetary system in Tahiti is a subject that may seem complex and difficult to understand, but it is nevertheless essential for the inhabitants of this French island located in the heart of the Pacific Ocean. Indeed, the currency used in Tahiti is the CFP Franc, a currency that has a different value from that of the euro, the currency used in mainland France.
The CFP Franc is the single currency of the French territories of French Polynesia, New Caledonia, as well as Wallis and Futuna. This currency is fully guaranteed by the French State, via the Banque de France.
It is interesting to understand how the creation and circulation of money works on the spot. To issue new banknotes, the Banque de France must request prior authorization from the Polynesian government. Existing banknotes are put into circulation directly by local commercial banks, which buy them from the Banque de France.
Did you know? It is possible to obtain CFP Franc banknotes in mainland France, directly from the Banque de France, or in certain exchange offices. Please note that the inversion of the acronyms CPF and CFP is a common trap. Indeed, the acronym CPF is often used to designate the Personal Training Account in France, while the acronym CFP does designate the currency used in Polynesia.
In conclusion, understanding the monetary system in Tahiti may seem complex, but it is important to take an interest in it, especially if you plan to travel to these islands at the end of the world. The CFP Franc is a single currency which has its own value, different from that of the euro. To learn more about this subject, we invite you to consult this link which will give you valuable information on the currency in Polynesia: Currency in Polynesia: zoom on the CFP Franc.
The history of money in French Polynesia
Currency was introduced to French Polynesia by French missionaries and settlers in the 19th century. The circulation of money was limited until 1945. At that time, the Banque de l’Indochine created French franc banknotes for French Polynesia. In 1949, the Banque de l’Indochine became the Banque de l’Outre-Mer. It was this bank that issued the first Polynesian franc banknotes in 1949. Since then, French Polynesia has used the same currency as New Caledonia, called the CFP franc.
Understanding the CFP Franc
The CFP franc is the official currency of French Polynesia, but also of the entire Pacific zone made up of New Caledonia, the Wallis and Futuna Islands, French Polynesia and the French Southern and Antarctic Lands. The Banque de la Polynésie française is the central bank that oversees the production and distribution of the CFP franc. It is responsible for monetary stability and regulation of the exchange rate between the CFP franc and the euro.
Currently, the exchange rate is fixed at 1 euro for 119.33 CFP francs. The Banque de France ensures the convertibility of the CFP franc currency into euros in order to facilitate commercial and financial exchanges between French Polynesia and metropolitan France. The Bank of French Polynesia issues banknotes of 500 F, 1000 F, 5000 F and 10,000 F. The existing coins are 1 F, 2 F, 5 F, 10 F, 20 F, 50 F, 100 F and 500 F.
The CFP franc has a fixed parity with the euro and is therefore not subject to exchange rate fluctuations. This guarantees the stability of the currency and minimizes the exchange risk for investors. The European Central Bank (ECB) plays a key role in regulating the exchange rate of the CFP franc against the euro.
The advantages of the CFP franc
The CFP franc has many advantages for French Polynesia and other countries in the Pacific region. Here are some of those benefits:
- Monetary stability: The fixed exchange rate between the euro and the CFP franc ensures monetary stability.
- Ease of exchange: The CFP franc is very accessible and can be easily exchanged for euros.
- Minimization of exchange risks: The price of the CFP franc is completely stable, which minimizes exchange risks and reduces costs for foreign investors.
- Ease of financial planning: The stability of the CFP franc facilitates financial planning for local or foreign companies operating in French Polynesia.
- Soundness of the monetary system: Central banks and local governments work together to ensure the soundness of the financial and monetary system.
- Currency compatibility: Intra-regional trade is facilitated by currency compatibility between countries that use the CFP franc.
Conclusion
The CFP franc is the currency used in French Polynesia and the Pacific zone, which also includes New Caledonia, the Wallis and Futuna Islands and the French Southern and Antarctic Lands. Monetary stability and ease of exchange are the main advantages of the PSC franc, which help to strengthen the soundness of the financial and monetary system. The CFP franc is thus an important asset for local or foreign companies wishing to invest in French Polynesia.