The CFA franc is pegged against the euro (previously the French franc) and the French Treasury guarantees convertibility with the euro. The 'cost' for this guarantee is that the BCEAO and the BEAC have to deposit 50 per cent of their foreign reserve holdings with the Treasury, receiving low returns (sometimes even negative real returns). This control of reserves means all cross-currency transactions involving the CFA Franc have to be mediated by the Treasury.

Fanny Pigeaud_ Ndongo Samba Sylla, Africa's Last Colonial Curr…, loc. 27