In 1991, the Socialist Federal Republic of Yugoslavia ceased to exist as a sovereign state and UN-member. Before its collapse, socialist Yugoslavia had economic problems, including inflation. The inflation problems were temporarily handled by its last prime-minister Ante Markovic. According to the historian Tvrtko Jakovina based in Croatia, Markovic was especially successful in stopping the growing inflation by changing the Yugoslav dinar into a convertible currency. During Markovic’s period, Inflation fell from 56 per cent in December 1989 to 2.4 per cent in March 1990, while gold reserves were close to the sum of the country’s foreign debt.
As socialist Yugoslavia disappeared a new “third Yugoslavia” was established in Belgrade in 1992 under the name “Federative Republic of Yugoslavia”, consisting of Serbia and Montenegro. Its economic situation was never seen as “stable” nor as “good” because of the all economic and financial mismanagement during the dictatorship and authoritarian rule of Slobodan Milosevic. One proof of that is the money note of 500 billion dinars. This hyperinflation was at the moment one of the worst ones in the world, and only other inflations as in Zimbabwe were seen as worse.