Regular Monthly Session of the CBBH Governing Board

The Governing Board of the Central Bank of Bosnia and Herzegovina, (CBBH) held it's monthly meeting at the CBBH head office in Sarajevo on 18th February 1999. The meeting was chaired by Governor, Peter Nicholl, and the other three Governing Board members, Manjolo Coric, Kasim omicevic, and Jure Pelivan.

The main items discussed were the CBBH draft financial results of 1998, a Financial Plan and Budget for 1999, and the first draft of the CBBH's annual report for 1998.

The Board considered the overall financial results for 1998 were pleasing. The assets of the CBBH had virtually doubled over the year from around KM 140 million at the beginning to KM 280 million at the end of December. The currency board cover for the KM was very healthy at the end of the year with free foreign reserves of DEM 29 million. The CBBH had expanded during the year and paid almost KM 1 million towards the cost of minting coins and still managed to fund its operations out of income and produce a small profit.

The Board also discussed four tenders the CBBH had received for external auditors and decided on the firm they would recommend to the Presidency. The financial results would be audited during February and March and the Annual Report revised and the final Report and Accounts submitted to the Parliament by the end of March 1999.

The Board also discussed progress that had been made in promoting the use of KM as the dominant currency in Bosnia and Herzegovina. The overall trend continued to be positive. Particularly pleasing was the strong increase in the use of KM in the Republika Srpska over the last month.The CBBH had made net sales of KM of KM 26.2 million in the RS over the month.

However, the Board was still disappointed with the level of use in the Herzegovina region of the Federation. They decided therefore that the CBBH should increase its focus on Herzegovina over the next few months. The initiatives would include increased discussions with politicians from the region, increased publicity about the CBBH and the KM in the region, and promoting measures that the Federation Government, public utilities and other agencies should take to promote the use of the KM. As once step in raising the CBBH profile in the region it was decided that the next meeting of the Governing Board would be held in Mostar on 18th March 1999.

The Board also agreed on a set of instructions for the exchange of worn and damaged KM banknotes and coins. These instructions will be sent to the Payments Bureaus and to all banks shortly. The instructions set simple criteria and impose no fees on anyone who wishes to exchange worn or damaged KM currency.