Kosovo has said it will not impose an immediate ban on the use of the Serbian dinar in the country after Western governments expressed outrage, AFP reports.
The ban, which was due to take effect, has raised fears of sharp criticism and backlash amid already tense relations with Kosovo's ethnic Serb minority.
Just hours before the ban was due to come into force, Kosovo's deputy prime minister, Besnik Bislimi, said the government would refrain from immediate measures to restrict the use of the dinar.
"We will not apply punitive measures immediately, but we will invest time in informing Serbian citizens about the ban," he told a news conference.
"The government of the Republic of Kosovo is committed to possible transition periods so that citizens can adapt as quickly as possible, as easily as possible and with minimal damage," Bislimi added.
The deputy prime minister insisted that "the euro remains the only official currency" in Kosovo.
The announcement followed a morning when the Kosovo government gave mixed signals and Bashkim Nurboya - chairman of the board of the Central Bank of Kosovo - indicated that work was underway on a possible postponement of the ban.
Kosovo's roughly 120,000-strong Serbian community has clung to the Serbian dinar since Serbian troops and government personnel withdrew from Kosovo in the late 1990s during a brutal war between Serbia and ethnic Albanian rebels.
Serbia has never recognised Kosovo's 2008 declaration of independence, and the two sides are at bitter loggerheads over complex bureaucratic issues in the former breakaway province, such as the recent dispute over number plates.
Many Serbs in Kosovo work in Serbian institutions, where their salaries, pensions and other financial transactions depend on the dinar rather than the euro, Kosovo's official currency.
Kosovo adopted the euro as its currency in 2002, although it is not a member of the euro area or the European Union.
Western governments have condemned the dinar ban as inflammatory, warning that the regulation is likely to upset local Serbs.
Over the weekend, a joint statement issued by the US embassy in Pristina, along with the Quint countries, called for a "suspension of the implementation of the regulation".
The so-called Quint - France, Germany, Italy, Britain and the United States - includes five NATO member states that focus on the Western Balkans.
Serbia's President Aleksandar Vucic was due to meet the five countries' ambassadors in Belgrade on Wednesday afternoon. / BGNES
