The currency unit of the country is the lev, divided into 100 stotinki (see Glossary). It is a nonconvertible currency with a variety of exchange rates, usable only in domestic transactions. Since January 1, 1962, the lev has been officially defined to contain 759.548 milligrams of fine gold—equivalent to 1.17 leva per US$1 at that time. This exchange rate was valid only for commercial transactions. In the wake of the United States dollar devaluation on December 18, 1971, the official commercial exchange rate was set at 1.08 leva per US$1 (greenback—see Glossary). A further revision of the exchange rate was put into effect on February 13, 1973, which established a parity of 0.97 leva per US$1. The subsequent decline in the value of the dollar in foreign markets did not call forth another official exchange revaluation to mid-1973.
The official tourist exchange rate for so-called capitalist currencies underwent similar revisions and was set at 1.65 leva per US$1 on February 14, 1973. The noncommercial rate for ruble area countries, based on a parity of 0.78 leva per 1 ruble, was equivalent to 0.64 leva per US$1 until that date; thereafter, at the new ruble-United States dollar parity, it was equivalent to about 0.59 leva per US$1.
In addition to the official exchange rates, there are three varieties of clearing account rates. The multilateral transferable ruble is used to clear accounts with other European members of the Council for Mutual Economic Assistance (COMECON—see Glossary). Socialist bilateral units arise from bilateral trade agreements with other communist countries. Neither of these two exchange varieties has private markets abroad. Bilateral clearing units arise from bilateral trade and payments agreements with about thirty noncommunist trading partners. These clearing units are traded sporadically abroad at varying rates of discount.
The lev has been traded on the black market in exchange for so-called capitalist banknotes or gold coins. The black market rate of the lev fluctuated between 4.60 leva per US$1 in January 1963 and 2.58 leva per US$1 in June 1972.
Except for small remittances or travel allocations to other communist countries, the lev is nontransferable for residents; resident status applies to all physical and juridical persons who have resided in the country for more than six months, regardless of their citizenship. Ownership of or trade in gold, foreign currencies, or so-called capitalist securities is prohibited, as is the import and export of Bulgarian banknotes. There are no investments by noncommunist country nationals in Bulgaria.
Exchange transactions are administered by the Bulgarian National Bank jointly with the Ministry of Finance, the Ministry of Foreign Trade, and the Bulgarian Foreign Trade Bank. Bulgaria is neither a member of the International Bank for Reconstruction and Development nor of the International Monetary Fund. Statistics on currency in circulation, the public debt, foreign exchange reserves, gold stocks, and the balance of payments have not been published.
FOREIGN TRADE
Foreign trade is a state monopoly. Trade policy is formulated by the BKP and government leadership; it is translated into a complex set of laws and regulations designed to encourage the expansion and qualitative improvement of production for export, to promote import substitution, and to bring about greater efficiency in production and foreign trade operations. Control over foreign trade is shared by the Ministry of Foreign Trade, the Ministry of Finance, and the Bulgarian National Bank through the Bulgarian Foreign Trade Bank.
Along with other elements of the economic structure, the foreign trade apparatus and the laws and regulations governing foreign trade have been frequently modified. As a result, there are two basic types of foreign trade organization: those attached to and serving individual economic trusts with a large export volume and organizations serving several trusts whose export activity did not justify a separate export department. Two foreign trade organizations that imported most industrial materials were attached to economic trusts responsible for the domestic distribution of supplies. Foreign trade organizations affiliated with trusts retain their legal identity and are not considered to be branches of the trusts they serve. Relations between foreign trade organizations and the trusts whose products they handle are governed by contracts, the framework of which is provided by official regulations. As a rule, foreign trade organizations carry on their activities for the account of the trust. There are a few organizations, however, that trade for their own account, and there are also a few economic trusts that have the right to engage in foreign trade activity directly.
Export plans are approved by the Council of Ministers for each economic trust in physical and value terms and by major trading areas, that is, member countries of COMECON, other communist countries, Western industrialized nations, and developing countries. Trusts pass their trade plans to foreign trade organizations. The plan of a single trust may be apportioned among several foreign trade organizations, and many foreign trade organizations receive plan assignments from several trusts so that their own foreign trade plan is a composite.