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. Last Updated: 07/27/2016

Bulgaria Battles to Rein In Money Crisis

SOFIA, Bulgaria -- Bulgaria's socialist government battled this week to restore confidence in the lev currency and said it expected to sign a standby agreement with the International Monetary Fund by mid-July.


Workers fearing factory closures stepped up their protests Friday and consumers rushed to spend cash and stockpile goods. But Thursday's increase of the central bank's main interest rate to a draconian 108 percent a year won breathing space for the lev.


After a record low of 132 to the dollar during the week the currency closed firmer Friday around 105 to the dollar, still 32 percent below its value a month ago.


This week's financial panic was touched off by divisions within the 16-month-old government of former communists over factory shutdowns and other harsh decision needed to win the backing of Western lenders.


Newspapers have been scathing about the crisis and say Prime Minister Zhan Videnov's government could fall as a result.


Deputy Prime Minister Roumen Gechev told national radio he thought the new interest rate would be held for "only a few days" to restore financial stability.


Imported products from bananas and whisky to electronic goods were being bought Friday mainly for hard currency.


Many banks imposed limits on the amount of money they paid out to anxious depositors though the lines outside them had dwindled following the lev's rebound.


On Monday, the cabinet is expected to announce its final list of loss-making state firms slated for immediate closure as part of its bid to win funding support from the IMF and World Bank.


Gechev, who is also economy minister, said Bulgaria would probably sign a standby agreement with the IMF by mid-July.





Imported medicines disappeared from shelves amid confusion over how much they were now worth.