CEOL - Serbia/Montenegro money transfers stay banned

BELGRADE, Dec 22, 1999 -- (Reuters) The Yugoslav central bank said on Tuesday it would maintain its ban on money transfers between Serbia and Montenegro after Montenegro again refused to allow the central bank's controllers to check on local banks.

The announcement came almost two months after the western-leaning republic decided to launch a dual currency system and move away from Belgrade's inflationary policies. "The National Bank of Yugoslavia, via its Accounting and Payment Operations Office (ZOP), tried again on December 14 to conduct a regular control of the payment Montenegro, and again it was not allowed to do it," ZOP said in a press release.

"The National Bank of Yugoslavia was once again prevented from performing its constitutional function on the territory of Montenegro and on the territory of the whole of Yugoslavia."

Late in October Montenegro introduced the German mark as a parallel legal tender in a bid to protect its tiny economy from inflation in Serbia.

The central bank responded by cutting off payment transfers between the two republics and the Serbian government erected barriers to deliveries of staples.

Montenegro, in turn, limited the amount of hard currency that can be taken out of the republic.

Serbia and Montenegro are the remaining partners in the Yugoslav federation, which has been shrinking since 1991.

The two have been at odds for the past two years, as Montenegro started to oppose policies keeping the country in isolation, while Belgrade insisted on a status quo.

In August, Montenegro urged Belgrade to reshape and rename their joint federation, asking for more autonomy in running its own economy, defense and foreign policies.

Should Serbia fail to agree to reform, Montenegro threatened to hold a referendum on independence

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