BOSNIA-HERZGOVINA'S CENTRAL BANK BEGINS OPERATIONS

SARAJEVO, Aug 11 (Hina) - Bosnia-Herzegovina's central bank, set up under the Dayton peace agreement, formally began operations on Monday, its governor, Serge Robert of France, announced at a news conference in Sarajevo. Since representatives of the country's two entities -- the Moslem-Croat Federation and the Bosnian Serb Republic -- have failed to reach agreement on the design of a common currency, the convertible mark will be used as the unit of account. The first deputy to the international community's High Representative to Bosnia-Herzegovina, Jacques Klein, who assumed office today, said he hoped that a solution to that problem would be found soon. Klein, who had up until now headed the UN Transitional Administration in the Danube river region of eastern Croatia, said that the present situation in Bosnia-Herzegovina reminded him a little of the reintegration process in the Danube region and of the problem of exchanging Yugoslav dinars for Croatian kunas, which was solved successfully. Klein cited the Belgian model, where the banknotes contain inscriptions in three languages. Robert, a former private banker who was appointed governor of the Bosnian central bank for a term of six years with three deputies from among Bosnia-Herzegovina's constituent nations, said that all preparations had been made for printing a new Bosnian currency, which would be put in circulation not later than three months after the country's three-man collective presidency had passed a decision on its design. With the opening of the central bank, the National Bank of Bosnia-Herzegovina and the National Bank of the Serb Republic ceased to exist. Bosnia-Herzegovina's central monetary institution will have three main departments in Sarajevo, Mostar and Pale which will perform only operative services on behalf of the central bank, Robert said. A portion of the liabilities of the former National Bank of Bosnia-Herzegovina has been transferred to the central bank, whose reserves now amount to a little less than 150 million German marks. Robert stressed that the central bank's primary task would be to preserve the value of the convertible mark at a set rate of one convertible mark for one German mark. He noted that the central bank would not provide loans for fear of encouraging inflation. Responding to a journalist's question, Robert said that all potential foreign investors could be guaranteed safe investments in Bosnia-Herzegovina. Such deposits would immediately be converted into the convertible mark, whose safety is the responsibility of the central bank. Robert said that there were no plans for forcible removal of the Yugoslav dinar or the Croatian kuna from the Bosnian market since it was believed that market laws would encourage the citizens of Bosnia-Herzegovina to make all transactions with the convertible mark. (hina) vm 112208 MET aug 97