As the economy of the Socialist Federal Republic of Yugoslavia collapsed and entered a prolonged decline in 1989, the country broke up into five new sovereign states by 1992, independence of which was fought over in a series of Yugoslav Wars.
With hyperinflation exacerbated by the economic embargo imposed during the Bosnian War, the Federal Republic of Yugoslavia (FRY) economy's downward spiral showed no real sign of recovery until 1995.
Alarmed FRY officials took several steps to tighten monetary policy in 1998, including ruling out a devaluation in the near term, increasing reserve requirements, and issuing bonds.
During this period, Montenegro rejected the dinar and adopted the Deutsche Mark (now replaced by the euro) as its official currency.
However, it was not until 2002, after intense macroeconomic reform measures, that the dinar became convertible—a first since the Bretton Woods Agreements laid out the post-World War II international exchange rate regime.
Managers tended to blame the dearth of interest on the current negative business climate in Serbia and Montenegro.
Economic aid - recipient: $2 billion pledged in 2001 (disbursements to follow for several years) Serbian dinar (CSD).