A shaken dinar

After a long summer lay off, the black market exchange rate started shifting again in the first week of September. Although the Group 17 said some time ago that the selling rate would rise from 6.8 to 7 dinars for one German mark, it is still uncertain whether the latest black market devaluation of the national currency is an indication that its much expected final collapse has started. Predictions by “opposition” economists that the German mark will cost at least 10 dinars in the near future are unreliable because thy are based on the assumption that the black market will definitely react to some fundamental economic disproportions. The black market is far from perfect too, and the only time it reacts instantly is when fresh dinars from the National Bank of Yugoslavia find their way to the streets.

The black market exchange rate has probably shifted because more money has printed, as there no other apparent reasons. Retail prices in August have risen by a “normal” 3.1 percent against the month before. The Serbian government said that its tax rvenues have risen by athird, while the Federal authorities made some cash byadopting a decision on the “re-registration” of vehicles imported by Montenegro. All this should mean that the authorities will not “borrow” money from the National Bank or finance the Kosovo  conflict  at the expense of a brighter future. The fact that that the economy did not survive this pecliar method of  boosting the budget is another matter, for the effects of the “operation” will be heard on the streets much later.

The price of petrol, the most reliable parametre of developments on the black market, is unchanged. The price of gas in Serbia is still defended by the Montenegrin government as it imported more gas in the first half of this year than in the whole of 1997. Hence the tiny coastal republic has become the importer of all 22.5 foreign gas on the Yugoslav market.
If the Montenegrin government finds it profitable to become Yugoslavia's main supplier of imported gas and the Yugoslav Left Wing Alliance (JUL) somehow fails to ban the Serbs from filling their cars and heaters with Montenegrin gas, the black market exchange rate might not explode to proportions expected after the drop of Yugoslavia's foreign currency reserves to just over 100 million US dollars.

However,  it less than likely that the Montenegrin script will come to life, as Belgrade's “gas tycoons” will not relinquish their monopoly of the local gas market. That's why they have already made a few “buiness trips” to Baghdad, Tripoli and Beirut, where business is done in a way ranking Serbian officials are all too familiar with. Barters such as “food for gas” are ideal to cover up the real costs of these transactions.

RUSSIAN ROULETTE: September is a month marking the beginning of the business year, when plans and projects are in their initial stages. That's why no dramatic changes occurred at the black market in September in recent history. However, that doesn't mean the trend won't go down the drain in the next few days, especially in view of the latest bad news from Russia for the Yugoslav authorities, who might live to regret making so many business agreements with Victor Chernomyrdin. Not to mention that more bad news can be expected from Kosovo.