 |  |  |
| Return to: Left History: a digital archive | Return to: Say no to imperialist wars! | Return to: NATO-Yugoslav War Internet Resources |
| | |
| Return to: Left History: a digital archive | Return to: Say no to imperialist wars! | Return to: NATO-Yugoslav War Internet Resources |
The Montenegrin government yesterday decided to make the D-Mark its official currency in a bid to shield its economy from rising inflation and a fall in the Yugoslav dinar.
The decision to adopt the D-Mark is the first step towards launching an independent monetary system. It is the most significant move Serbia's remaining partner has taken so far towards loosening ties with the Yugoslav federation.
The next move will be to legalise the use of other currencies in business transactions. In the final stage, the republic will launch its own currency, the Montenegrin marka, which will trade side by side with the D-Mark.
Steve Hanke, economic adviser to the Montenegrin president, Milo Djukanovic, who designed the new system, said: "These are the first sketches of paint. The final gloss will be when Montenegro issues its own currency."
Montenegrins view an independent monetary system as the only way to protect themselves from rising prices. Over the past month, the dinar has lost one third of its value against the D-Mark.
"This has been a provoked decision," said Miroslav Ivanisevic, the republic's finance minister. Belgrade's economic policies "are threatening our economic survival and the social security of our people", he said.
Yesterday's legislation overrules an earlier decision by the Yugoslav National bank, which governs foreign exchange transactions. The National Bank of Montenegro will take over responsibility in the foreign exchange markets.
From today, all prices will be quoted in both dinars and D-Marks. The government will pay all salaries and pensions in the German currency.
When the Montenegrin marka is launched, between 30 and 90 days' time, it will be backed by a currency board.
The number of markas will equal the total value of the country's foreign currency reserves.
By investing its foreign currency reserves in bonds and other assets, a currency board will enable the republic to increase its value by between 2 and 4 per cent per year.