mic figures announced by the authorities are strongly encouraging for the countrys potential, though testing times still lie ahead. Growth opportunities in the short run may turn strongly vulnerable to outside effects and rapid measures for recovery of the real sector will be vital. New laws to support pension reform and capital market activities are already in the pipeline.Source: Monthly Bulletins CURRENCYThe peg of the Bulgarian lev to the Deutsche mark at an exchange rate of BGL 1,000 per 1 DEM proved its efficiency as an important factor for the financial stabilisation in the country. The turmoil of early 1999 quickly faded away and activities were brought to normal pace. Eventually, a draft for denomination of the national currency was introduced, envisaging a new currency to be put in circulation with three zeros less than the present. Thus as of 5 July, 2001 one new Bulgarian lev equals one Deutsche mark. A significant step made by the authorities has been the acceptation of the obligations of Article VIII, Sections 2,3, and 4 of the IMF Articles of Agreement, with effect as of 24 September 2000. No restrictions are now imposed on making of payments and transfers for current international transactions. Despite the existing pressure for upward adjustment of the anchor level, the general opinion is that there is enough political will to defend the peg at the current position of BGL 1,000 per DEM. As of January 2001, the introduction of the European currency brought to a fixed rate to the Euro at 1997.83 levs.INFLATIONAnchoring of the Bulgarian lev to the German mark allowed the continuous and uncontrollable depreciation of the national currency to be ceased. This was to help subdue inflation in the country, which had skyrocketed to the cumulative 578.6% in 1999. In 2000 y-o-y CPI was down to 1%, remarkably outperforming the projected annual 16.4% by the government. In this aspect the country was the best performer among the count...
