Foreign Currency Can Be Exchanged Only In One Place

"Everything is available now, I no longer have to buy many loves of bread and a case of long lasting milk," states a housewife for VREME, adding worriedly: "If only the German mark does not start shifting."  And truly, after the stabilization in the market supply of staple foods and announcements of liberalization of gasoline sales, the onus is on the authors of economic policies to try hard to maintain stability of the domestic currency, and to allow citizens to survive better through the rough times.

Precisely with that goal in mind, the Federal Government and the National Bank of Yugoslavia (NBY) adopted a set of decrees which should strengthen state foreign currency reserves and give the monetary authorities maneuvering space for defending the domestic currency.  According to the Decree on Foreign Currency Trade With Outside Countries, Yugoslav commercial banks will be obliged to hand over all their available foreign currency to the NBY, and business owners will have to deposit all their foreign currency in their commercial bank.  On the same day, or the next day, a commercial bank must deposit all the foreign currency it received from its commercial clients into the treasury of the central bank.

Citizens are freed from such obligations, while the Decree stipulates that "the Federation guarantees" all the foreign currency which is the foreign currency accounts and savings accounts of citizens.  So called old foreign currency savings will be returned in accordance with the Law on Returning Old Foreign Currency, which means that beginning with July 1 of this year, citizens could expect at least 150 German marks for each foreign currency account.  As far as the paying out of foreign currency accounts or foreign currency savings accounts for citizens not included under this law (foreign currency savings which was deposited after March 18, 1995), the Governor of NBY, Dusan Vlatkovic stipulated that commercial banks cannot have smaller sums in their foreign currency treasuries than 25,000 Geraman marks, which will be used for these purposes.
In order to prevent the outflow of foreign currency from the country, the Federal Government stipulated that companies will take care of their obligations toward the outside world only on the basis of approval by an authorized individual, probably the NBY.  The Decree states that obligations toward companies or citizens from countries with which Yugoslavia is at war are sequestered, just like obligations toward companies and citizens of countries which are in some kind of alliance with countries with which Yugoslavia is at war.

Wit the goal of calculating what sort of foreign currency funds it can count on, the Government stipulated that all domestic companies must report to the central bank the balances on their foreign bank accounts.  Also, companies have been ordered to charge make good on all their credits abroad within 30 days from when this Decree is enforced (March 29, 1999).  According to the decision by the Federal Government, foreign currency which domestic companies make from exports must be brought back into the country within 30 days from when the goods leave the country.  The same principle holds on the side of import - foreign goods which have been paid for must enter the country within 30 days from when they were paid for.

According to the Governor's Decree on Monetary Policy, the new monetary balance could increase by five percent in April, by comparison to where it was at the end of March.  It is not mentioned in the Decree what the monetary balance is at this time, but judging by the exchange rate for the German mark on the black market, it can be concluded that the NBY is managing to maintain its announced restrictive monetary policy.

Economists themselves are admitting that they are surprised by the fact that with the first bombing the dinar did not lose in its value.  What is more, already with the first sirens, the majority of dealers disappeared from the streets.  Admittedly, the few foreign currency dealers who are working are raising and dropping the exchange rate of the German mark, but variations are negligible, so that it can be said that the dinar is successfully resisting the aggression.  According to some forecasts, it can be expected that the dinar might even strengthen.

The situation in the market, by contrast with the beginning of the war crisis, has been completely stabilized.  Bread need no longer be bought at dawn, just like milk also, while bakers, dairy farmers, as well as producers of other staple foods are firmly premising that they will continue with the present levels of production.  As far as prices of staple foods are concerned, they have not jumped even in private stores, which is the result of a Federal Government decree about direct price control of these products.  According to this Decree, merchants and producers are required to maintain the prices at the level of March 23, that is to say they must cancel all price jumps following that date.

Caption: Gasoline

The initial decision that gasoline can only be purchased by priority has been suspended, so that citizens who own a car will be allowed to purchase 40 liters of gasoline per month on coupons, while farmers can expect 30 liters per hectare of workable soil.  Taxi drivers will get coupons for 150 liters of gasoline per month, while individuals who produce or sell food products will be guaranteed 50 liters per month.  Coupons will be printed by the Minister of Internal Affairs of Serbia, although it has still not been announced when their distribution will begin.

Caption: Cigarettes

For now, cigarettes are the only goods for which there is still a serious shortage.  There is not black market reselling on the street, imported cigarettes arrive rarely to private kiosks, so that only domestic "Stampa" kiosks can be said to contribute to any kind of cigarette sales.  The majority of these sell only two packs per customer, while imported cigarettes are hard to find even in free shops, according to smokers.