A new currency and a political crisis

In 2005 the Banque Centrale de Madagascar replaced the Malagasy franc with the ariary, at a rate of one ariary to five francs, in a move to modernise the currency; the ariary has since been managed under a floating regime with periodic intervention. The most serious disruption in the country's recent history came with the political crisis of 2009, when a coup suspended donor aid and trade preferences with the United States, weakened investment and public services, and led to a fall in output. The long transition ended with elections in 2013 and a gradual return of donor support, but income per head is still lower than before the crisis. Cyclones, a heavy dependence on vanilla, mining and textile exports, and political uncertainty explain much of the volatility in Madagascar's growth and exchange-rate series.