Accounting Assignmnet代写:保加利亚

2016-12-28 15:13

The underpinnings of the 1996 collapse of the Bulgarian economy through the failure of its industrial base had deeper implications which were created by the instability of the lev, high inflation and the near complete failure of the banking system.[9] One of the first moves made by the new government was to peg the lev to the strong German mark on a parity basis (one lev equaled one mark), under the provision that the government maintain “… hard currency reserves…”[10] which would cover all levs that were in circulation and in commercial banks. The preceding also included a restriction on mew borrowing by the banks and these measures helped to reduce inflation from 484.2% during the first part of 1997 to 3.7% by July of that same year.
These round of reforms also served to eliminate the weaker financial institutions (banks) from the equation thus consolidating the market which had the effect of increasing the degree of confidence in this sector, as well as helping to reduce the debt of companies as well as the government. The developments provided the first step in establishing a sound fiscal under footing. Banks were privatized along with state owned and run industries and this helped to set the climate for increased foreign investment which resulted in a needed influx of hard currency. The cash infusion generated by the sale of state owned enterprises was an aid in raising capital to help fund the economic turnaround and the new Bulgarian stock exchange is playing a major role in helping the country finance industry growth and expansion.