in extreme cases, the withholding of a portion of regular
pay. Application of the more severe sanctions entails a serious
deterioration of the economic organization's finances that adversely
affects its production program. Through close contact with borrowers and
detailed supervision of their operations the bank endeavors to forestall
delinquencies and the attendant losses to the economy. In December 1972
the Council of Ministers adopted a decision to enhance the role of the
banking system in administering the economy by intensifying its
participation in the formulation of economic plans and by expanding its
authority in monitoring plan fulfillment.

Currency

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 tradin