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Madagascar completes currency switch

Madagascar has completed the replacement of its Malagasy franc with a new currency, the ariary.

From Monday, all prices and contracts will have to be quoted in the ariary, which was trading at 1,893 to the US dollar. The Malagasy franc, which lost almost half its value in 2004, is no longer legal tender but will remain exchangeable at banks until 2009. The phasing out of the franc, begun in July 2003, was intended to distance the country from its past under French colonial rule and address the problem of the large amount of counterfeit francs in circulation. "It's above all a question of sovereignty," Reuters quoted a central bank official as saying. "It is symbolic of our independence from the old colonial ways. Since we left the French monetary zone in 1973 we should have our own currency with its own name." The ariary was the name of a pre-colonial currency in the Indian Ocean island state.