Officials in Kosovo say they will forge ahead with a controversial decision to restrict all cash transactions anywhere in the country to euros from February 1, but they will give time for ethnic Serbs in the country to adjust to the new currency regime.
Western nations have urged a suspension of the decision to allow for a "sufficient period" of transition and for clear and effective public communication for ethnic Serb municipalities comprising some 120,000 people who for two decades have continued to use the Serbian dinar.
SEE ALSO: Banning The Dinar, Kosovo Tries To Sever Lifeline Between Serbs In North And BelgradeAfter a high-level meeting among Kosovo officials on January 31, Deputy Prime Minister Besnik Bislimi said an "easy transition" will be ensured to ease tensions over the move.
"Starting on February 1, we will not implement punitive measures immediately. However, we will invest time in informing Serb citizens" of the ban, Bislimi added.
He did not give a specific time frame for the implementation of punative measures, or details on how the information campaign will be run.
Kosovo President Vjosa Osmani told reporters earlier in the day that "several options" were being considered on the "practical implementation" of the move, which has been mandated by the central bank.
Even though it's not a member of the European Union or its currency zone, Kosovo 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 2008 declaration of independence, still pays many ethnic Serbs at institutions in Serb-dominated parts of the country in dinars. Many also hold their pensions and get child allowances in dinars.
In 10 of Kosovo's 38 municipalities, where Serbs represent a majority, they have been able to make payments in dinars or withdraw dinars from the ATMs of Serbian-based banks.
Your browser doesn’t support HTML5
Ethnic Serbs In Kosovo Unsettled By Looming Ban On Serbian Dinar
The dominant Serbian party in Kosovo, Serbian List, which has long-running ties to radical Serbian nationalists and Belgrade, has accused Kosovar policymakers of trying to achieve the "expulsion of Serbs without the use of weapons." It said the ban on the dinar threatened "the physical survival of the Serbian people."
But Bashkim Nurboja, chairman of the board of the Central Bank of Kosovo, told RFE/RL's Balkan Service the bank has a "legal obligation" to regulate the financial system, especially an issue like the currency which "has remained unregulated for a very long time."
“This does not stop anyone from accepting money from any country.... It means a citizen, whatever income he accepts, goes to the bank and opens a bank account and accepts the money.... The sender sends it, the receiver accepts it. On the way, the money is converted into euro currency,” he said.
The Central Bank last week issued the regulation restricting all cash transactions anywhere in the country to euros from February 1.
The new regulation also restricts foreign currencies other than the euro to safekeeping in physical form or foreign-currency bank accounts for payments abroad or foreign-exchange activities.
"Currency exchange can be performed in the Republic of Kosovo only through institutions that are licensed by the Central Bank of Kosovo and offer this service," the regulation said.
Dinars have routinely been accepted and disbursed by Bank Postanske Stedionica, NLB Komercijalna Bank, and the Post of Serbia, a Serbian public enterprise.