Proposed Devaluation Of Pacific Franc Criticized
WELLINGTON, New Zealand (Radio New Zealand International, Nov. 14, 2012) – There has been an overwhelmingly negative reaction in French Polynesia to a suggestion that the Pacific franc be devalued.
The idea was mooted by the government in preparing budget documents as it considers options to shore up competitiveness and tackle the high cost of living.
But the opposition has pointed to the dependence on imported food and medicines which would go up in price.
One member labeled the idea as unrealistic because the power to alter the exchange rate rests with the French authorities and because the French Pacific franc is also in use in New Caledonia and Wallis and Futuna.
French Polynesia’s economy has been in a steep decline and according to public television is forecast to contract by a further 6.7 percent next year.
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