BELGRADE, Yugolsavia -- Yugoslavia's government Tuesday devalued its currency, the dinar, by 24.6 percent against the U.S. dollar and all other Western currencies, the national bank announced.
The devaluation came after the federal government Saturday announced a package of austerity measures to curb spiralling inflation that in October reached 140 percent -- the highest annual rate in peacetime Europe.
The government increased prices of flour, bread, cooking oil, milk, sugar, gasoline, electricity, coal and railway fares between 33 percent and 69 percent, and then immediately imposed a price freeze and salary controls, planned to stay in effect until June 30.
The price increases are expected to increase the cost of living by 18 percent and industrial prices by 24 percent, government officials said.
The Yugoslav dinar has been sliding daily because of the inflation rate.
Saturday, $1 bought 1,038 dinars, and after the devaluation Tuesday, the U.S. currency traded at 1,299 dinars. A year ago, $1 was worth 433 dinars.
Government officials said they expect the currency to continue its decline as prices rise.