Under the Zhivkov regime, Bulgaria followed the customary communist pattern of a single state-run bank performing all banking and investment functions. Investment policy was the province of state planning agencies, with substantial input from the BCP and the national bank. Post-Zhivkov reform aimed atออออ privatizing and compartmentalizing the banking system, a goal that would likely require years of gradual reform.

Currency and Exchange

The national currency of Bulgaria is the lev (plural, leva--see Glossary), which is divided into 100 stotinki (sing. stotinka). Throughout the communist era, the lev could be used only in domestic transactions because it was not convertible into foreign currency. Bulgarian nationals were prohibited from owning foreign currency, and the law prohibited citizens and foreigners from entering or leaving the country with leva. Like domestic prices, the value of the lev was administratively determined. This led to frequent overvaluing of the lev in terms of hard currencies and black market rates well below official exchange rates. Besides official rates, which were based on a gold parity developed after World War II, a commercial rate was used for business transactions and statistical purposes, and a tourist rate determined the amount received by foreigners in Bulgaria for their domestic currencies. None of these arbitrary rates reflected the relationship of domestic and foreign prices. Trade with Western countries was conducted in hard currency, while the transferable ruble, an accounting device with no convertible value, was primarily used to clear commercial accounts within Comecon. In 1990 the lev was devalued several times, finally settling at rates of about 0.76 stotinki to the United States dollar (official), 3 leva to the dollar (commercial), and 7 leva to the dollar (tourist). The black market rate fluctuated considerably, but ended 1990 at approximately 11 leva to the dollar. In mid-1991 the Bulgarian National Bank (BNB) issued conversion tables for the lev into major world currencies (see table 15, Appendix). The official value at that time was 18 leva to the United States dollar.

Data as of June 1992