Comorian Franc (KMF): History, Value & Euro Peg

The Comorian Franc (KMF) is the official currency of the island nation, the Union of Comoros, which is located in the Indian Ocean, near Madagascar and Mozambique. Originally pegged to the French franc, the Comorian franc is, as of 2020, pegged to the euro.

The franc of Comoros is nominally divided into 100 centimes, but no denominationDenominationA denomination is a classification for the face value of a financial instrument. This includes financial instruments such as bonds, currency lower than 1 franc has ever been minted. Minted and printed currency ranges from 1 franc to 10,000 francs.

Summary

• The Comorian Franc (KMF) is the official currency of the island nation, the Union of Comoros, which is located in the Indian Ocean near Madagascar and Mozambique.
• Originally pegged to the French franc, the Comorian franc is currently pegged to the euro.
• Comorian currency is minted and printed in denominations ranging from 1 franc to 10,000 francs.

History of Comoros

Originally comprised of a collection of four islands – Grande Comore, Anjouan, Mohéli, and Mayotte – Comoros was a French colony from the mid-19^th century until 1975 when all of the islands except Mayotte formed an independent nation, the Union of Comoros. Mayotte chose to remain under the governance of France.

The vast majority of the country’s population – the majority of which live in extreme poverty – follows the religion of Islam, which is the official religion of the country. Comoros has three official languages – French, Arabic, and Comorian. The country’s two main industries are agriculture and fishing. It has one notable export, a popular perfume essence called ylang-ylang.

As of 2020, the population of the Union of Comoros is estimated at just under one million people.

The Comorian Franc

The Banque Centrale des Comores is the central bank of the country. It is guided by an eight-member Board of Directors that consists of officials of the government of the Union of Comoros and representatives of the central bank of France and the French government. The Comorian central bank imposes a compulsory reserve on the country’s banks equal to 30% of total depositsDepositDeposit is a term used to denote the money kept or held in any bank account, especially to accumulate interest. The fund used as a security.

From the time of its independence in 1975 up until 1994, the Comorian franc was pegged to the French franc at a rate of 50:1 (50 Comorian francs = 1 French franc). A devaluation of the Comorian franc eventually led to a re-peg at the rate of 100:1.

Upon the creation of the euro in 1999, the Comorian franc ceased being pegged to the French franc, moving instead to a peg to the euro. As of late 2020, the KMF/EUR exchange rate is 491.48 Comorian francs to 1 euro. The KMF/USD exchange rateExchange RateAn exchange rate is the rate at which one currency can be exchanged for another between nations or economic zones. It is used to determine the is approximately 403.80 Comorian francs to 1 US dollar.

The currency of the Union of Comoros is denominated in coins and banknotes, as follows.

Coins issued by the central bank are in denominations of 1 franc, 2 francs, 5 francs, 10 francs, 25 francs, 50 francs, and 100 francs. The denominations below 25 francs are rarely used. The coins are actually minted in France by the Monnaie de Paris, the oldest existing coin minting institution in the world.

The central bank issues bank notes in denominations of 500 francs, 1000 francs, 2000 francs, 5000 francs, and 10,000 francs.

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