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. Last Updated: 07/27/2016

Transdnestr Currency Condemned

CHISINAU, Moldova -- Moldova on Wednesday threatened reprisals against the self-declared Transdnestr republic for launching its own currency as a symbol of independence.


Authorities in the rebel region, which has failed to win international recognition for its independence bid, introduced new coupons Monday. They hope eventually to enter the Russian ruble zone.


Moldova's National Bank issued a statement, read on national television Tuesday night, saying the monetary reform was illegal, that the only legal currency in Moldova was the leu and that the bank reserved the right to retaliate.


On Wednesday, the bank's first deputy director, Dumitru Ursu, said by telephone that a tough response was planned against the Dnestr region's banks. Four of Moldova's 24 commercial banks are Dnestr-based.


Ursu said the national bank could cancel the licenses they had earlier granted to these banks.


"We could even appeal to the heads of CIS states to isolate completely the Dnestr banks, so they will not have any contacts with their CIS counterparts, to say nothing of other foreign partners," said Ursu.


"We are tired of explaining to local authorities and banks from the Dnestr region such simple principles as 'one country, one currency and one banking legislation.'"


Moldovan and Dnestr leaders agreed in April to open a payments center for the national bank in the Dnestr capital, Tiraspol. But the deal foundered when Dnestr officials insisted the Moldovan bank accept payment in its currency -- at that time old Soviet rubles with stickers on top -- rather than in leu.


The Moldovan National Bank declaration said the official leu currency was guaranteed by the bank's assets and commodities circulating on the Moldovan market. But "the ersatz money put into circulation in Tiraspol is illegal and cannot be accepted by the population or the banks," it added.


"According to Moldova's constitution," the declaration said, "the official currency of Moldova is the Moldovan leu and the exclusive right of emission belongs to the National Bank.