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Bulgaria: President Says Consensus Unlikely On IMF-Proposed Currency Board

  • Ivo Indzhev

Sofia, 28 November 1996 (RFE/RL) - Bulgarian President Zhelyu Zhelev yesterday told the head of the International Monetary Fund (IMF) that political consensus is unlikely for an IMF-proposed currency board in Sofia.

In a letter to IMF Director Michel Camdessus, the anti-communist Zhelev expressed concern that opposition support for the currency board plan would also help prop up the current Socialist government. The IMF has conditioned the resumption of its lending to Bulgaria on the creation of the board.

Fearing another breakdown in the relationship between Sofia and the IMF, Zhelev told Camdessus that the currency board would be discredited if it was supported only by the Socialist majority in Parliament.

At the weekend, Socialist Prime Minister Zhan Videnov appealed to the Bulgarian media to support the board. Correspondents say dubious loaning practices by state and private banks have drained the national budget in recent years. In the past year alone, the cost of a dollar on Bulgaria's foreign exchange markets has increased by more than 500 percent.

Thousands of depositors attempted to withdraw their savings last spring when a single dollar cost less than 80 lev. But many banks told savers they would have to wait six months to get their money. Bulgarians have since watched their savings evaporate along with the collapse of the national currency. In order to change their savings into hard currency, those who managed to withdraw their money last week had to pay up to 400 lev per dollar.