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Bulgaria: Government Confirms Plans For Currency Board

By Ivo Indzhev and Ron Synovitz

Sofia, 28 February 1997 (RFE/RL) -- Bulgarian interim Prime Minister Stefan Sofiansky today confirmed that Sofia will introduce a currency board in an effort to strengthen its national currency, the lev.

The measure, recommended by the International Monetary Fund (IMF), would peg Bulgaria's foreign exchange rate to hard currency reserves in the Bulgarian National Bank.The IMF has said that it would not disburse fresh credits to Sofia unless the currency board is implemented. An IMF team is now in Sofia for talks on the issue.

In Prague today, Bulgarian President Petar Stoyanov said that he hopes the IMF will disburse $200 million in stalled credits before the country's April 19 parliamentary elections. Stoyanov said his expectations for this are based on reforms already being undertaken by the caretaker government.

Meanwhile, our correspondent in Sofia quotes Sofiansky as saying that the European Investment Bank will respond within 10 days to proposals for financing critical infrastructure projects. The projects include plans to modernize Sofia Airport, to rebuild major roads and to update telecommunications.

Iliyan Vasilev, the newly-appointed head of Bulgaria's Foreign Investment Agency, said in Sofia today that the government would start what he called an "aggressive" campaign to attract foreign investment.

Vasilev said obstacles to foreign investment would be removed. He said investors should be granted a tax-free status for their first three-years of involvement in the country. Bulgaria's total direct foreign investment has been less than $1 billion since 1989 -- one of the worst records in Eastern and Central Europe.