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Bulgaria: IMF To Resume Work With Interim Government

By Petko Georgiev and Robert Lyle

Sofia, 6 February 1997 (RFE/RL) -- The International Monetary Fund (IMF) says it is ready to resume working with Bulgaria as soon as an interim government is in place.

An IMF spokeswoman in Washington said the fund welcomed the agreement among political parties for early elections and "hopes the conditions will soon permit resumption of work on a financial program to stabilize the economy."

Most importantly, the spokeswoman said: "As soon as an interim government is in place, work can resume."

The IMF last summer approved a stand-by loan of around $582 million, but never got beyond the first drawing of about $116 million because of the rapid disintegration of the Bulgarian economy.

Fund experts had been working with Sofia on ways to stabilize the economy and the Bulgarian currency, the lev, including a proposal that the government adopt a currency board form of central bank.

However, the deteriorating political situation brought almost all cooperation to a halt while IMF officials quietly warned Bulgarian leaders that the longer they waited, the worse the situation would get.

IMF officials emphasize that even with an interim government, they will be able to quickly get back to serious work on putting a currency board in place as well as implmenting the tough monetary and fiscal measures that are going to be necessary to begin stabilizing the Bulgarian economy.

Under the political accord, the Bulgarian parliament will be dissolved as soon as technically possible and President Petar Stoyanov will appoint a caretaker cabinet to run the country until the early general elections in April.

The exchange rate of the Bulgarian lev to the U.S. dollar reacted swiftly to the news of a political accord for early elections. After reaching a record high of 3000 levs to the dollar late Tuesday afternoon, the rate fell sharply to 2500 levs Tuesday evening and further to 2000 levs Wednesday morning.

Financial assistance from the IMF is vital for Bulgaria, especially ahead of new payments on its foreign debt due in June.