The franc is the official currency of the Republic of Guinea. It is also known as the franc guineen, in French, hence the abbreviation/symbol of FG. The hundredths subunit of the franc is the centime, but denominations under one franc are not circulated due to their low value. Guinea is a West African nation that had been a colony of France until gaining independence in 1958. The Guinean franc is issued by the Central Bank of the Republic of Guinea.
The Guinean franc was introduced in 1959 as a replacement for the multi-national West African CFA franc. The West African and Central African CFA francs were interchangeable currencies guaranteed by the French treasury. CFA francs began circulating in 1945 as a regional currency for French colonies. However, many nations kept the CFA franc as their currency after gaining independence, changing the meaning of the abbreviation from Colonies francaises d’Afrique, or French colonies of Africa, to Communaute francaise d’Afrique, which translates to French community of Africa.
When the Guinean franc was introduced, it was valued on par with the CFA franc. In 1960, one year after the Guinean franc began circulation, Guinea officially withdrew from the franc zone, as the region is known where the CFA franc is legal tender. In 1970, Guinea repelled a Portuguese-led attempt at a hostile government takeover. A national purging of supporters of the coup attempt commenced, which included the killing of the President of the Central Bank and the Minister of Finance. A new currency was introduced at that time called the syli, replacing the franc at a rate of 1 syli: 10 francs.
A Guinean franc was reintroduced in 1985. This second Guinean franc was valued at par with the syli, but was almost immediately devalued. Inflation grew rapidly, and although it has slowed in recent years, it was still at 15 percent as of 2008. The value of the Guinean franc in 2006 was four times lower than it was in 2000. In addition, due to a lack of foreign currency a black market exchange operates in Guinea. It is estimated that between 5 million and 10 million AUD worth of currency trades on the black market each day. The government of Guinea took steps to suppress the black market in March 2011 by limiting the number of official exchange bureaus inside Guinea to 30.