The National Bank of Serbia on February 7 condemned the refusal by Kosovo to allow a delivery of dinars into the country just days after the government in Pristina introduced a new regulation banning the use of any currency other than the euro in commercial transactions.
"The National Bank of Serbia strongly condemns today's incident and reiterates that it is necessary to immediately repeal the discriminatory, illegal and outrageous measures," the country's central bank said in a statement.
The dinars were intended for the payment of salaries, pensions, and other benefits to ethnic Serbs in northern Kosovo.
A spokesman for the Kosovo customs authority said Serbian representatives asked at the Jarinje border crossing whether the import of the dinars was allowed.
"We explained that without the authorization of the Central Bank of Kosovo, the circulation of monetary funds is not allowed," Adriatik Stavileci told RFE/RL.
The National Bank of Serbia said the vehicle carrying the dinars was sent “in accordance with the usual practice for many years.” The cash was to be picked up by another transport company that has permission from Kosovar authorities to transport money, it added.
The bank’s statement reiterated that "the discriminatory, illegal, and outrageous measures" introduced by Kosovo should be withdrawn.
The restriction banning financial institutions from using any currency other than the euro for commercial transactions took effect on February 1.
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Ethnic Serbs In Kosovo Unsettled By Looming Ban On Serbian Dinar
Though Kosovo is not in the euro currency zone, it unilaterally adopted the euro in 2002 to help bring monetary stability and to simplify and reduce transaction costs inside and outside the country.
Belgrade, which has never acknowledged Kosovo's independence, still pays many ethnic Serbs at institutions in Serbian-dominated parts of Kosovo in dinars. Many also hold their pensions and get child allowances in dinars.
Kosovo's deputy prime minister, Besnik Bislimi, said the National Bank of Serbia sent a truck full of Serbian dinars worth nearly 1 million euros to the Kosovo border. He added that the individuals who transported the currency presented documents of a nonexistent company with the claim that they wanted to send the money to an entity that also does not exist in Kosovo. This was to be for the benefit of people whose names they did not know or have, he said.
Bislimi said the new regulation clarifies that only banking and nonbanking financial institutions licensed by the Central Bank of Kosovo with special authorization from the institution can import currency into Kosovo.
"The Republic of Kosovo is willing to work and help find a mechanism that ensures such funds are legally sent to the final beneficiaries, and in the fastest possible time," Bislimi said on Facebook.
Serbs in Kosovo usually receive pensions from the Serbian budget on the 10th of the month, but Serbian President Aleksandar Vucic on February 2 said the disbursements from the Serbian budget this month would be sent earlier.
Kosovar Prime Minister Albin Kurti said the regulation is not against the Serbian dinar and that ethnic Serbs who receive pensions and other assistance from Serbia in dinars can continue to receive them, but these payments must be deposited in bank accounts in Kosovo in euros.
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Kosovo Shutters Serbian-Backed Municipal Offices Days After Banning Foreign Currency
Kosovo said the implementation of the regulation will take place through a transitional period during the month of February.
The European Union last week expressed concern over Kosovo’s move and urged officials in Pristina to allow an extended implementation period to avoid “seriously complicating” the lives of ethnic Serbs in the country who are being forced to move away from the dinar and adjust to a new currency regime.
The United States also expressed concern that the decree could negatively affect the Serb population living in Kosovo.