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 dollarization (euroisation). Dollarization means a rigid foreign exchange regime (fixed foreign exchange regime) in which a country uses other country’s currency in parallel or instead of its own currency. Montenegro went through basic forms of dollarization: unofficial dollarization until November 1999, then partial official dollarization from November 1999 to November 2000, when Montenegro became officially dollarized/euroised economy by introducing first the German Mark and then the euro in 2002 as a sole legal tender. More on reasons and effects of dollarization in Montenegro can be found in the working paper „Economic Policy in Dollarized Economies with Special Review of Montenegro“.