Regulatory Alerts2004-03-12
Instruction No. 001-GV/OF-2004 of March 12, 2004 on Technical Modalities for the Transition to the Ariary
The Governor of the Central Bank of Madagascar issued Instruction No. 001-GV/OF-2004 to establish the technical modalities for transitioning to the Ariary currency. The directive mandates that all book transactions express amounts with two decimal places, while cash settlements convert fractional decimals into Iraimbilanja multiples based on a defined rounding threshold. It further standardizes the ISO and domestic currency codes, prescribes exact written formatting for invoices and cheques, and provides a computational formula for automated financial processing.
BANQUE CENTRALE DE MADAGASCAR The Governor INSTRUCTION NO. 001-GV/OF-2004 of March 12, 2004 on Technical Modalities for the Transition to the Ariary
The Governor of the Central Bank of Madagascar, Having regard to Law No. 94-004 of June 10, 1994 on the Statutes of the Central Bank of Madagascar, Having regard to Law No. 2003-004 of July 8, 2003 amending the provisions of Article 7 of Law No. 94-004 of June 10, 1994 on the Statutes of the Central Bank of Madagascar, Having regard to Decree No. 2003/781 of July 8, 2003 authorizing the issuance by the Central Bank of Madagascar of new types of banknotes in denominations of 10,000 Ariary, 5,000 Ariary, and 2,000 Ariary, as amended by Decree No. 2004/320 of March 9, 2004, DECIDES:
Definitions Article 1: The following terms shall mean:
- fiduciary currency (monnaie fiduciaire), the aggregate of banknotes and coins in circulation;
- book currency (monnaie scripturale), the aggregate of payment instruments, other than banknotes and coins, represented by book entries.
Codifications Article 2: The Ariary is denoted by two letters “Ar”, with a capital “A” followed by a lowercase “r”. The ISO codification used for all international transactions is expressed in three uppercase letters “MGA”. These abbreviations “Ar” and “MGA” precede the numerical amounts.
Book Presentation (Scriptural) Article 3: Any amount denominated in Ariary is expressed, where necessary, with two decimal places after the comma ranging from “0.00” to “0.99”. The Iraimbilanja is written as “Ar 0.20”. When the result obtained after a series of operations yields multiple decimal places arithmetically, the amount is rounded to two (2) decimal places. (See point 3 of the Annex).
Settlement in Fiduciary Currency (Cash) Article 4: At the time of settlements in banknotes and coins, the decimals referred to in Article 3 above are converted into multiples of the Iraimbilanja according to the following method:
- to the next higher Iraimbilanja if the first decimal is greater than or equal to half of the Iraimbilanja;
- to the next lower Iraimbilanja if the first decimal is less than half of the Iraimbilanja. The difference observed during conversion is recorded at each periodic account closing. (See point 4 of the Annex).
Presentation in Words Article 5: Any written expression of Ariary amounts in book transactions is spelled out in full, including the decimal digits. (See point 5 of the Annex).
Done in Antananarivo, on March 12, 2004 THE GOVERNOR, Gaston E. RAVELOJAONA.
ANNEX CODIFICATIONS
- Ariary abbreviation: “Ar”: Examples: Ar 100,000.80; Ar 2,549,263.60; Ar 75,629.40
- Ariary abbreviation following ISO codification: “MGA”, to be used for all international operations: Examples: MGA 100,000.80; MGA 2,549,263.60; MGA 75,629.40
BOOK PRESENTATION (SCRIPTURAL) 3. Numerical expression: amount rounded to two decimal places Example: Sales for Ar 100,000.80; sales commission 19.25%; VAT 20%. (in Ar)
| Before Rounding | Rounded to 2 Decimals |
|---|---|
| Sales 100,000.800 | 100,000.80 |
| Sales Commission (19.25%) 19,250.154 | 19,250.15 |
| Subtotal 119,250.954 | 119,250.95 |
| VAT (20%) 23,850.191 | 23,850.19 |
| Total Amount (TTC) 143,101.145 | 143,101.14 |
| Notations on the invoice (without conversion to Iraimbilanja multiples): | |
| Sales Ar 100,000.80 | |
| Commission Ar 19,250.15 | |
| Total before VAT Ar 119,250.95 | |
| VAT Ar 23,850.19 | |
| Total Amount (TTC) Ar 143,101.14 |
PAYMENT IN BANKNOTES AND COINS 4. Table for converting decimals into Iraimbilanja multiples:
| From | To | Conversion to Iraimbilanja Multiple | Numerical Expression | Number of Iraimbilanja Coins |
|---|---|---|---|---|
| 0.00 | 0.09 | 0x1/5 Ar | 0.00 | 0 Iraimbilanja |
| 0.10 | 0.29 | 1x1/5 Ar | 0.20 | 1 Iraimbilanja |
| 0.30 | 0.49 | 2x1/5 Ar | 0.40 | 2 Iraimbilanja |
| 0.50 | 0.69 | 3x1/5 Ar | 0.60 | 3 Iraimbilanja |
| 0.70 | 0.89 | 4x1/5 Ar | 0.80 | 4 Iraimbilanja |
| 0.90 | 1.00 | 5x1/5 Ar | 1.00 | 5 Iraimbilanja or 1 Ariary |
Example: At the time of collecting the Total Amount (TTC) from the previous example (amount to be collected and converted into an Iraimbilanja multiple): Total Amount (TTC) Ar 143,101.14 Amount to be collected Ar 143,101.20 (see table above) Conversion difference Ar 0.06 The decimal “0.20” corresponds to one Iraimbilanja coin.
Deposit Slip Template:
| Quantity | Nature | Value (Ar) | Amount |
|---|---|---|---|
| 12 | B.B. (banknote) | 10,000.00 | 120,000.00 |
| 4 | B.B. (banknote) | 5,000.00 | 20,000.00 |
| 1 | B.B. (banknote) | 2,000.00 | 2,000.00 |
| 1 | B.B. (banknote) | 1,000.00 | 1,000.00 |
| … | B.B. (banknote) | 100.00 | 100.00 |
| … | Coin | 1.00 | 1.00 |
| 1 | Coin | 0.20 | 0.20 |
| Total | 143,101.20 |
PRESENTATION IN WORDS 5. Written expression: Examples: a) Ar 143,101.20: “One hundred forty-three thousand one hundred one Ariary twenty” b) Cheque wording: B.P. Ar 2,549,263.60 Pay against this cheque Two million five hundred forty-nine thousand two hundred sixty-three Ariary sixty To the order of ……………………………….. At ……………………, on ………………..
EXAMPLE OF COMPUTER PROCESSING 6. Conversion formula (if the computer program uses or relies on an Excel spreadsheet): = ROUNDDOWN(x;0) + VLOOKUP((x-ROUNDDOWN(x;0); αi : α i+5 ; βi : βi+5) where: x is the address of the cell to be converted; αi : α i+5 is the range of cells containing the criteria βi : βi+5 is the range of cells containing the target values (0; 0.20; 0.40; 0.60; 0.80) (see example below)