Ekonomski i politički aspekti konvertibilnosti dinara
Economic and Political Aspects of Convertibility of the Yugoslav Currency

Summary/Abstract: The achievement of convertibility for the Yugoslav dinar presupposes not only the establishment of a satisfactory state of the country’s balance of payments, but even more so the introduction of measures designed to produce a much higher level of monetization of the Yugoslav economy, that is, a systematic effort to increase the possibility of free use of the national currency for all domestic payments. Another important area in which systemic solutions remain not only inadequate but also definitely improperly chosen is the treatment of foreign-exchange operations by the Yugoslav banks. One such solution is the continued obligation of the banks to accept foreign¬ -currency deposits and the simultaneous prohibition of foreign-currency credits in the country', which results in the accumulation of huge losses due to exchange rate fluctuations. A number of conditions need to be met to ensure the successful reform of foreign economic relations. The paper analyzes the prospects for the reform and the problems which arose following the adoption of the package of measures on 15 May 1988.

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