The establishment of the Central Bank of Montenegro signalled a new phase in the monetary history, that is, the history of central banking in Montenegro.
The CBCG pursues monetary policy in a specific foreign exchange regime. The existing foreign exchange regime in Montenegro is dollarisation (Euroisation). Dollarisation means a rigid foreign exchange regime (fixed foreign exchange regime) in which a country uses another country’s currency in parallel or instead of its own currency. Montenegro went through all the basic forms of dollarisation: unofficial dollarisation until November 1999, then partial official dollarisation from November 1999 to November 2000, when Montenegro became an officially dollarised/euroised economy by first introducing the German Mark and then the Euro in 2002 as the sole legal tender. More on the reasons and effects of dollarisation in Montenegro can be found in the working paper “Economic Policy in Dollarised Economies with a Special Review of Montenegro“.