FINANCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84-00022R000200030040-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 12, 2016
• Document Release Date: September 12, 2000
• Sequence Number: 40
• Content Type: REPORT

Approved For Release 2001/07/27 : CIA-RDP84-00022R000200030040-6
This &C= "t bas boon
approved for release CIt mix
the HISTORICAL REVI F1~
r s of
~
thl tra1 Inte3 Li anraa Aa.-, cep _
Date Z/74/ / d// /'f ? V7 ,ter f
The Indochinese piaster is considerably overvalued at present bedause its ex-
change rate was not changed when the franc was devalued in 1949. Exchange rates,
based on the Paris free-market franc, fix the piaster's official value at 20.58 to
the US dollar. The blaclr.market rate fluctuat:s between 40-45 to the dollar.
Ori'd..nary governmental expenses are borne by the administration at Saigon; those
of the current military campaign by the French treasury. Despite this and the fact
that the Saigon government was able to collect 60 percent of its revenue from cubtollis
receipts there was a deficit of 241,000,000 piasters in 1949 which had to be financed
ff?om reserve funds. Some reduction in income was occasioned through the requirement
that all excise taxes must go to the separate state administrations.
Of the 167 billion francs appropriated by the French for the military campaign,
90 billion (5.29 billion piasters) were spent in various ways in Indochina itsdlf.
The inflationary effect of the enormously increased purchasing power brought about by
this expenditure of more money than had previously been in circulation was to some
gentr~jYp1[~~jif]",~ejj(h[e withdrawal of new money in the form of export of capital
Ills 0JL7 17.4(+1 liRl11 R/T ~~J ~,~'r{
only, for the use of DClfK %.
lie rc
to France a1 To ne~i s d remittances to their native countries by members of the
1C V
underfhW?ms !CiRICAt.
~BtFrench armed s ces payments for French imports, conversion of profits from black
..~/tny~~$a 24Q1107/27 : CIA-RDP84-00022R000200030040-6
000,072
 Approved For Release 2001/07/27 : CIA-RDP84-00022R000200030040-6
market and smuggling operations, and ordinary flight of capital.
Attempts have been made to improve the situation and lessen the burden on
the French treasury through strict control of exchange transactions, but
authorities have been unwilling to make a serious attempt at restricting transfers
from piasters to francs because of the dire economic and political effects that
would result in Indochina.
Approved For Release 2001/07/27 : CIA-RDP84-00022R000200030040-6