Chapter

BOSNIA AND HERZEGOVINA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Bosnia and Herzegovina is the convertible marka.
Other legal tenderThe deutsche mark circulates widely in the two constituent entities of Bosnia and Herzegovina. In addition, the Croatian kuna circulates widely in the Croat majority area of Bosnia and Herzegovina, and the Yugoslav dinar circulates in the Republika Srpska.
Exchange rate structureUnitary.
Classification
Currency board arrangementThe convertible marka is pegged to the deutsche mark at par. The Central Bank of Bosnia and Herzegovina (CBBH) no longer publishes indicative exchange rates for other currencies. The CBBH guarantees unrestricted convertibility of the convertible marka for deutsche mark.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of controlThere are no foreign exchange controls in place for transactions in convertible marka.
International security restrictionsn.a.
Payment arrearsn.a.
Controls on trade in gold (coins and/or bullion)n.a.
Controls on exports and imports of banknotes
On exports
Domestic currencyYes.
Foreign currencyThere are no limits on the amount of foreign currency that may be taken across international borders.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyIndividuals and exporters may hold foreign exchange in accounts with commercial banks and do not need to supply evidence of the source of these funds.
Held abroadThese accounts may be opened, but approval is required from the MOF in the two entities.
Accounts in domestic currency convertible into foreign currencyThe conversion of convertible marka deposits into deutsche mark is guaranteed, and commercial banks may convert balances on these accounts into any other currency.
Nonresident Accounts
Foreign exchange accounts permittedNo approval is required if the investment is registered in accordance with the investment law.
Domestic currency accountsYes.
Convertible into foreign currencyThese accounts may be converted, but approval is required.
Blocked accountsYes.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Positive listYes.
Negative listYes.
Open general licensesYes.
Licenses with quotasYes.
Other nontariff measuresYes.
Import taxes and/or tariffsNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsYes.
Financing requirementsNo.
Documentation requirementsExporters have to be authorized to engage in foreign trade. Customs requires that exporters provide documents accompanying the goods.
Export licensesNo.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Restrictions on use of fundsFollowing an agreement with Germany, the CBBH will provide documentation to Germany on pensions from Germany that are being paid by the commercial banks under its jurisdiction to the workers concerned.
Capital Transactions
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operations
Commercial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsOnly prudential regulations on banks apply.
Controls on direct investmentNo.
Controls on liquidation of direct investmentFull repatriation of capital is permitted after compliance with tax laws.
Controls on real estate transactions
Purchase abroad by residentsMOF approval is required.
Purchase locally by nonresidentsYes.
Controls on personal capital movements
Loans
By residents to nonresidentsYes.
To residents from nonresidentsThe foreign exchange law prescribes limits.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer into the country by immigrantsYes.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending locally in foreign exchangeYes.
Purchase of locally issued securities denominated in foreign exchangeYes.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Liquid asset requirementsYes.
Credit controlsYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsThere are legal controls on stocks, shares, and securities.
Changes During 1999
No significant changes occurred in the exchange and trade system.

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