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General TradingC
CPA Franc
The CFA Franc (also referred to as CPA Franc) is a currency used in two monetary zones in Africa: the West African CFA Franc (XOF) and the Central African CFA Franc (XAF). Both versions are pegged to the euro at a fixed rate and are guaranteed by the French Treasury. The peg provides exchange rate stability for the member countries but also limits their independent monetary policy flexibility.
Example
“Forex traders tracking African markets monitor the CFA Franc (XOF/XAF) knowing its value is pegged to the euro, meaning shifts in EUR/USD directly influence the CFA Franc's purchasing power relative to the US dollar.”