CBBiH: We do not print money without coverage

The Central Bank of Bosnia and Herzegovina, in accordance with the Law on the Central Bank of Bosnia and Herzegovina, puts into circulation and withdraws domestic currency, consisting of KM banknotes and coins as legal tender, strictly adhering to the currency board rules defined by the Law on the CBBH. The Central Bank of Bosnia and Herzegovina is obliged, in accordance with the Law on the Central Bank of Bosnia and Herzegovina, to ensure the regular supply of convertible mark banknotes and coins through their circulation and withdrawal, upon request from commercial banks, which includes the replacement of banknotes and coins that have become unfit for circulation. Such banknotes are withdrawn from circulation through commercial banks and replaced with new banknotes and coins, and the fulfillment of requests from commercial banks for the withdrawal of KM cash from the vaults of the Central Bank of Bosnia and Herzegovina is carried out in accordance with the Law and regulations of the Central Bank of Bosnia and Herzegovina, it was announced from the CBBH, reports Patria.

- KM banknotes, like any other banknotes, have a lifespan, as they wear out and get damaged through use in circulation. Annually, about 20% of KM banknotes that are unfit for circulation are withdrawn and destroyed, meaning such banknotes are replaced with new ones. In addition, the continuous increase in KM cash in circulation due to demand from commercial banks, which amounts to about 10% annually, should also be taken into account. For coins, a continuous increase in demand is characteristic, especially for small denomination coins.

The current contracts for the production and supply of convertible mark banknotes and coins were concluded in 2016, exclusively for the purpose of regular supply of KM banknotes and coins in accordance with the estimated needs of cash circulation for a longer period. The Central Bank of Bosnia and Herzegovina has been producing additional quantities of these banknotes and coins since its establishment to date, and such production is a prerequisite for the regular supply of KM cash.

Information on cash management, detailed data on quantities in circulation, is available to the public through regular monthly and annual reports of the Central Bank of Bosnia and Herzegovina, which are published on the CBBH website.

Upon completion of the production process, the Central Bank of Bosnia and Herzegovina will decide on the successive release of KM banknotes and coins into circulation and publish it in the Official Gazette of BiH and the official gazettes of the entities and Brčko District.

Therefore, the printing of KM banknotes and coins under the aforementioned contracts cannot be linked in any way to the allegations from some media, according to which the production of new quantities of KM banknotes and coins is carried out for the purpose of issuing them without coverage, which would constitute a violation of the Law on the Central Bank of Bosnia and Herzegovina and the currency board rules.