Fifteen Years of the Slovenian Tolar
Ljubljana, 11 December - The tolar, the Slovenian national currency, celebrated its 15th and final anniversary on 8 October. As of the new year Slovenia will abandon the currency, which has been enjoying a high level of trust among its citizens, to adopt the euro.
The country embarked on the journey of fiscal sovereignty on 8 October 1991, when the government of the newly independent Slovenia adopted a decree declaring the tolar the sole legal tender. Other key decrees were issued on that day, as a three-month transition period during which all independence-related activities had to be stopped came to an end.
Until the new notes and coins were ready, special vouchers served as temporary tender and as an immediate replacement for the Yugoslav dinar. The first vouchers were issued on 9 October and replaced the dinar within three days at an exchange rate of 1:1. At the end of September 1992 Banka Slovenije, Slovenia's central bank, started to circulate the first new 1000, 500 and 100 tolar notes.
In January 1993 the notes were joined by coins; the transitional vouchers were gradually withdrawn from circulation. The note with the highest denomination, 10,000 tolars, was issued in 1995.
The initial exchange rate was set at 32 tolars to one D-mark and while the majority of foreign experts advocated a fixed exchange rate system as more appropriate for countries in transition, the government - pressed by a shortage of foreign reserves - adopted a floating system. Nevertheless, interventions by the central bank in the exchange rate were rare in the following years.
Despite the initial political and economic uncertainties, the credibility of the tolar was established fairly quickly and the currency went on to become one of the most trustworthy emblems of the country, according to public opinion surveys. Slovenia managed to overcome its initial shortage of foreign reserves with foreign trade surpluses in the 1992-1994 period. It also managed to cut inflation from 117.7% in 1991 to 8.6% in 1995, when it made the tolar convertible.
Less than two months after entering the EU on 1 May 2004, Slovenia entered the ERM II exchange rate mechanism, a grooming phase for eurozone membership, setting itself the goal of carrying out the changeover to the euro in 2007. Slovenia is the first country that joined the EU in 2004 to have succeeded in achieving this goal.
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