Is monetary policy possible without an issuance function: the case of Montenegro

Since the end of 1999, Montenegro belongs to a group of dollarised economies. The process of dollarisation in Montenegro has had positive implications on economic performance. However, by renouncing the issuance function, the country gave up some significant monetary policy attributes. Since the Central Bank of Montenegro has a certain number of monetary policy instruments at its disposal such as reserve requirement policy, short-term liquidity loans, possibility of conducting open market operations and a potential role of the lender of last resort, this begs the question whether it possible to perform independent monetary policy under such conditions.