SARRAFS - THE EARLIEST MONEY CHANGERS IN SERBIA

Original scientific paper
Autor: Prof Dragana Gnjatović PhD

Summary: During the 19th century, and prior to the re-estabishment of the monetary sovereignty and establishment of the national central banking institution, in Serbia were in circulation many kinds of gold, silver, and copper coin money of the Ottoman Empire and European countries. Money was changed in the exchange shops, set up by the Sarrafs in the larger trading centres. Foreign currency exchange rates of these various types of money were expressed in the Ottoman monetary unit, the groschen. Due to the inflationary policy of money debasement conducted by the Sultan Mahmoud II for fiscal reasons, on the local monetary market in the Principality of Serbia there was a constant substantial difference between the nominal and the real exchange rate. In this paper we offer an analysis of the autonomous policy of the exchange rate of the Principality authorities, focused on mitigating negative effects of the groschen depreciation in the economy and the state finances of Serbia. Implementation of this policy led to the creation of conditions for the formation of the local foreign exchange market.

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