KOZARIC: NO DEVALUATION OF BOSNIAN MARK

SARAJEVO, Bosnia (January 10,2008) – The Governor of the Bosnian Central Bank Kemal Kozarić has resolutely denied the possibility of devaluation of Bosnian Mark (BAM) as the cause of inflationary blow and a wave of price increases.

"I categorically refuse all speculations on devaluation and that needs to be clearly said", Kozarić told Bosnian daily Dnevni Avaz.

The Governor of the Bosnian Central Bank reminded that the Law on National currency says that Bosnian Mark is pegged to the Euro exchange rate. Therefore the change cannot occur as a cause of political decision. The value of the Bosnian Mark compared to Euro is determined at the exchange rate of BAM 1.955 for EUR 1.

However, Kozarić confirmed that the real value of Bosnian Mark in the previous year declined due to series of price increases.

"The fact is that price increases affect real purchase power of the Bosnian citizens", Kozarić said.