5 Francs – Madagascar

In 1966, Madagascar's currency situation was characterized by its recent transition to an independent monetary system following the end of the Malagasy Franc's peg to the French Franc. Upon gaining independence in 1960, the nation initially remained within the CFA franc zone, using a currency guaranteed by the French Treasury. However, in 1963, Madagascar exited this arrangement and introduced its own distinct Malagasy Franc (FMG), managed by the newly established Banque Centrale de la République Malgache. This move was a key symbol of economic sovereignty, allowing the government greater control over its monetary policy to support national development goals.

The economy in the mid-1960s was predominantly agricultural, relying on exports like coffee, vanilla, and cloves. The value and stability of the new FMG were therefore heavily dependent on the volatile prices of these primary commodities on the world market. While the central bank aimed to maintain a stable exchange rate, the economy faced underlying pressures, including a growing trade deficit and the challenges of building domestic financial institutions from the ground up. The currency's credibility was still in a formative stage, both domestically and internationally.

Overall, the currency situation in 1966 reflected a young nation cautiously navigating its post-colonial economic path. The Malagasy Franc operated without the backing of the French guarantee, placing the full responsibility for its stability on Madagascar's own central bank and the performance of its export-driven economy. This period was one of foundational management, setting the stage for the monetary challenges and inflationary pressures that would become more pronounced in the following decades.