Bosnian central bank marked this week 20 years since the launch of the national currency, the convertible mark.
The first KM banknotes were issued on 22 June, 1998, a year after the central bank started its operations. Initially, only paper banknotes in denominations of 50 pfennig, 1 KM and 10 KM were put into circulation. A month later, the banknotes in denominations of KM 20, 50 and 100 were put in circulation. The KM 200 banknote was issued in 2002.
The convertible mark was pegged to the Deutsche Mark at the time of the launch, under the exchange rate 1 KM = 1 DEM. When Germany joined the Eurozone, the KM was pegged to the Euro.
The first convertible mark coins were put in circulation on 9 December 1998. The 50 pfennig, 1 KM and 5 KM paper banknotes were removed from circulation and replaced by coins. By the end of 1999, the convertible mark became the only legal tender in Bosnia.
The name of the currency was derived from the Deutsche Mark, the currency favored by all groups in Bosnia during the Bosnian war and after its end in 1995. The “convertible” description was meant to reassure Bosnians that the currency is exchangeable.