20 Francs – New Caledonia

In 2006, New Caledonia's currency situation was defined by its continued use of the CFP franc (XPF) as its legal tender, a monetary arrangement that had been in place since 1945. This currency is issued by the Institut d'émission d’outre-mer (IEOM) and is pegged to the French franc, and subsequently to the euro, at a fixed and guaranteed exchange rate. This peg provided significant monetary stability for the territory, insulating it from local inflation shocks and ensuring seamless financial integration with France, its primary economic partner and source of subsidies and public investment.

The currency framework was a direct reflection of New Caledonia's unique political status as a French special collectivity under the 1998 Nouméa Accord, which set a path toward increased autonomy and a possible independence referendum. Economically, the fixed peg to the euro facilitated trade and investment but also meant that New Caledonia had no independent monetary policy. This was a point of occasional debate, as the territory could not devalue its currency to boost the competitiveness of its key export, nickel, whose booming prices in the mid-2000s were driving a period of significant economic growth and budgetary surplus.

Thus, in 2006, the CFP franc was not a subject of imminent crisis but rather a stable pillar within a broader, evolving political-economic landscape. The discussions around currency sovereignty were largely theoretical and linked to long-term political decisions under the Nouméa Accord, rather than immediate policy changes. The system's benefits of stability and credibility were generally seen as outweighing the costs of forgone monetary autonomy, especially during a period of robust nickel-driven economic expansion.