The CFA franc’s stability is a source of concern. The drop-off in oil prices has weakened one of the two CFA franc regions so much that fears of devaluation have emerged again. In the end, the status quo is bound to prevail. With IMF support, several countries have engaged in stabilisation programmes that are beginning to bear fruit. Liquidity indicators are still a far cry from the alert thresholds defined in the CFA monetary agreements, and the financial and inflationary effects of devaluation would be disastrous. Yet to sustain the currency peg, several major challenges lie ahead, not only for the West African Economic and Monetary Union (WAEMU), whose robust growth fuels macroeconomic imbalances, but also for the Central African Economic and Monetary Community (CEMAC), which is now paying a heavy price for its oil dependency.
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