Kosovo: PM Kurti claims Serbian dinar not 'banned'

Kosovo's Prime Minister Albin Kurti said on Wednesday that the Serbian dinar was not technically "banned," trying to argue that people could still possess the currency.

However, he also said that the euro was now the "only means of payment" in Kosovo.

Kurti was speaking to news agency AFP several days after his announcement that the Serbian dinar would no longer be legal tender for commercial transactions in the country, a move that elicited international criticism.

"We are not banning Serbian dinars, people can have Serbian dinars, but the only means of payment is euro," Kurti told AFP.  "It's not our goal either to punish anyone or to surprise citizens, we want to have them on board."

A month-long transitional period has already been put in effect, to allow for further communication and time to resolve issues, the Kosovar prime minister said.

Serbia protests shipment of dinars stopped at border

Meanwhile, Serbia's central bank on Wednesday accused the Kosovo government of blocking a shipment of dinars on the border.

The Serbian government supplies dinar to pay salaries, pensions, social benefits and other payments to Serbs in Kosovo. 

"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," Serbia's central bank said in a statement.

Kosovo authorities in turn claimed that only authorized companies could bring currency into the country and the Serbian vehicle was informed of this after enquiring about bringing across the dinars.

What are the new currency laws in Kosovo?

Having unilaterally declared independence from Serbia in 2008, the majority of Kosovo uses the euro, even though the country is not a part of the EU.

However, areas of northern Kosovo that are populated mostly by ethnic Serbs continue to use the dinar, with much of that population relying on the government of Serbia for financial support.

From February 1, the Kosovar government put into effect a rule issued in 2023 that banned banks and other financial institutions in the area from using any currency apart from the euro in local transactions.

EU and US express concerns over new currency rules 

The day before the new rules went into effect, the European Union called on Kosovo to postpone the plan, fearing an escalation in tensions with Serbia once more.

An EU statement expressed concern "about the consequences ... on the daily lives of Kosovo Serbs and other communities throughout Kosovo due to absence of prior consultation, in particular on its impact on schools and hospitals, given the apparent absence of alternatives at this moment."

US Ambassador Jeffrey Hovenier met with Kurti in Pristina and said last Wednesday, "We think this issue really deserves more careful consideration and also discussion within the dialogue."

He expressed fears the move would "escalate ethnic tensions and prove problematic for the daily life of a number of citizens of Kosovo."

Both Kosovo and Serbia hope to join the EU, but normalizing their relations will be a precondition for either side to do so.

km/msh (AFP, AP, Reuters)