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Belgrade unveils convertible currency

BELGRADE, Yugoslavia -- The Yugoslav government introduced a revamped and fully convertible currency Monday, part of a strict new monetary policy designed to curb runaway inflation that exceeded 2,600 percent in the past year.

Yugoslavia joins Poland and Czechoslovakia as the only East Bloc countries with convertible currencies.

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The value of the Yugoslav monetary unit was set at seven dinars to one Deutsche mark, the official news agency Tanjug said. That translates to roughly 12 dinars to the U.S. dollar.

Belgrade also revalued its currency, giving the one-dinar note a value equal to 10,000 old dinars, Tanjug said. The move simply shifts the decimal on prices for all goods four places to the left. For example, an item that cost 2 million dinars under the old system would now carry a 200-dinar price tag.

Both measures are part of Prime Minister Ante Markovic's anti-inflation package, approved by the Federal Assembly Dec. 18.

Accompanied by a wage freeze and a gradual relaxing of government price controls, the measures are aimed at curbing the country's galloping inflation rate. The government hopes to bring down inflation from last year's 2,600 percent to about 13 percent, Tanjug said.

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Yugoslavia's economic crisis is believed to be partly to blame for a sharp drop in Communist Party membership in the past year, the news agency said.

About 100,000 people left the party in 1989, Tanjug said, bringing to 600,000 the total number of dropouts since 1983, when the party had a record 2.2 million members.

The greatest proportion of drop-outs were younger party members. Tanjug said only about 15 percent of current party membership is under the age of 27, down from 33 percent in 1983. The desertions are said to stem from disillusionment over the party's inability to solve the nation's economic crisis and chronic ethnic unrest.

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