Yugoslavia Devalues Its Currency
Sep. 09, 1999
BELGRADE, Yugoslavia (AP) _ The Yugoslav government will devalue the national currency, a newsletter reported today.
The move reflected the weakness of the economy after a decade of mismanagement and NATO's 78-day bombing campaign.
The V.I.P. newsletter quoted Deputy Prime Minister Jovan Zebic as saying that state financial institutions had been ordered to strengthen foreign currency reserves ahead of the devaluation. No date was set for the move.
The official exchange rate for the dinar now is 11 to one dollar _ half the black market rate.
The last devaluation of the dinar was in 1996.
A similar decision was postponed in October because the National Bank's hard currency reserves were too low to protect any new exchange rate.
In January, hard currency reserves were estimated at approximately $110 million. To increase the reserves _ to nearly $300 million _ the government recently proposed that all foreign trade companies have at least $5,500 on permanent bank deposit.