Necessary Decision

The decision by Milorad Dodik's cabinet on basing the exchange rate of the YU dinar according to the convertible German mark (KM) was not sufficient reason for the National Bank of Yugoslavia to discontinue its transfer payments to Republika Srpska (RS), in the opinion of Dodik.

"It is evident that there is more to this than meets the eye.  This decision has been reached with the knowledge of the political movers and shakers in Serbia and Yugoslavia, and it has political connotations," stated Dodik.

According to Dodik, the basing of the new exchange rate of the dinar on the KM was motivated by the clear discrepancy between the market and official exchange rates, because of which the budget of RS and the people who depend on it were losing out continuously.

"The government exploited its authorizations to the fullest so as to protect the real value of the KM," stated Dodik, emphasizing that RS has not turned its back on the Yugoslav dinar, but that it must protect its economy.

The dinar is a legal monetary unit, which is confirmed by its present use in transfer payment transactions in RS.  But the KM is also a legal monetary unit," stressed Dodik.
The Finance Minister of Republika Srpska, Novak Kondic, stated that "Because of the great pressures exerted by foreign currency exchange dealers in the last two and a half months, as well as by our commercial banks, foreign currency is being taken abroad and into Yugoslavia.  Just on the basis of that, according to our figures, RS lost more than 50 million marks in five months through the dealings of five commercial banks.

Of course, there is no question here of any attempts by the government of RS to attempt to penetrate the monetary system of the National Bank of Yugoslavia, but it merely wished to protect the budget of RS and to enable those people who depend on the budget to receive realistic wages, pensions and all else," added Kondic.
Kondic denied all claims that the decision to devaluate the YU dinar were influenced by international organizations and high officials of those organizations: "In the preceding one to two months, contacts with representatives of international organizations such as the International Monetary Fund, the World Bank, the Office of the High Representative and other organizations did take place, but those talks did not influence in any way the reaching of this decision by our government."