Domestic currency is not under threat, and allegations by the Center of Civil Initiatives (CCI) that over one half of the money mass is not convertible are groundless and inaccurate, stated the Central Bank of BiH.
The statement said that the CCI presented inaccurate information which imply the violation of the Law on Central Bank of BiH and raise doubt around the full coverage of the domestic currency – the convertible mark. Central Bank states that they are implementing monetary policy based on currency board which entails that every convertible mark let in the circulation has full coverage in foreign currency reserves, in accordance with the Law on Central Bank of BiH.
Furthermore, the statement says that, according to data from the Balance Sheet for April 2016, coverage of monetary passive with foreign currency reserves, i.e. the coverage of domestic currency with foreign currency reserves, amounts to over 100 percent – 107.35 percent to be precise.
“Stability of the domestic currency has never been under threat, thanks to primarily the commitment of the Central Bank of BiH to the consistent and strict implementation of the policy of currency board. This is supported by monthly and annually report of the Bank approved by the independent outside auditor and adopted by the Presidency of BiH and both Houses of the Parliamentary Assembly of BiH,” it was stated.
The Central Bank of BiH states that the convertibility of the domestic currency is also not in question – convertible mark can be converted, i.e. exchanged, for EUR according to fiscal rate in accordance with the Law on Central Bank of BiH or for some other currency, according to the valid rate, in any commercial bank in BiH.
The statement also says that the stability of the monetary system in all countries is based on trust in the credibility of the monetary policy and the central bank and that the undermining of the credibility with inaccurate statement, such as those in the report of the CCI, may lead to unforeseeable consequences and enormous damage for the monetary policy and financial stability of BiH. “Given the specific roles of monetary institutions, the Central Bank of BiH included, we stay open for cooperation and for providing explanation about all aspects of monetary policy and our operations,” the Central Bank of BiH stated.
(Source: akta.ba/photo: zenicablog.com)