½ Cent – French Indochina

In 1939, the currency situation in French Indochina was defined by the dominance of the Piastre de Commerce, a silver-based currency issued by the Banque de l'Indochine. This bank, though privately owned, held the exclusive privilege of note issuance for the colony. The piastre was notably strong, deliberately overvalued by French authorities to benefit metropolitan interests. Its high exchange rate made imports from France cheap for the colonizers and local elites, but it severely handicapped Indochina's export competitiveness, particularly for rice and rubber, by making them more expensive on the world market. This policy created a persistent trade imbalance and drained wealth from the local economy to the benefit of the French colons and the mother country.

The currency system was inherently dualistic and hierarchical. Alongside the silver piastre, a subsidiary currency of zinc and copper-alloy coins circulated for everyday transactions among the indigenous population. More significantly, the monetary zone was expansive, as the Banque de l'Indochine's piastre also served as the official currency in the French concessions in China (Guangzhouwan) and, until 1937, in Cambodia and Laos. This created a unified but extractive financial bloc. Furthermore, the colony's finances were deeply integrated with France; a large portion of Indochina's reserves were held in French francs in Paris, tethering its economic fate to the metropolitan power.

By the eve of World War II, this system was under strain. The global economic turbulence of the 1930s and France's own financial weaknesses pressured the fixed exchange rate. While still formally pegged to silver and the franc, the piastre's management was increasingly geared toward insulating the colony from external shocks and maintaining French control. The outbreak of war in Europe in September 1939 would soon exacerbate these pressures, leading to stricter exchange controls and the eventual severing of the franc link during the wartime Japanese occupation, which would irrevocably disrupt the pre-war monetary order.