Bosnia and Herzegovina - Money

After the ethnic leaders failed to agree on a new currency, the UN introduced in 1998 a new currency, the

convertible mark. The convertible mark was fixed to the German mark. It gained acceptance, and the Central Bank of Bosnia and Herzegovina increased its reserves. Yugoslav dinars still circulate in the Serb Republic, and the Croatian kuna is used in the Croat areas of the Federation.

The government is still hoping to increase its capitalization by pressing for the privatization of the numerous small commercial banks. Raiffeisen Zentralbank Oesterreich, an Austrian bank, recently acquired many banks, including the Market Banka. The Austrian bank has also submitted privatization papers to the government bank privatization unit. It is not clear whether this will attract foreign attention, because the banking sector is weak and the economy is being reconstructed slowly.