The penalty interest rate on delinquent loans is 10 percent (it was 8 percent through 1970), compared to a normal range of 1 to 5 percent on loans for working capital. Whenever a bank loan or supplier credit is delinquent for more than three months and the delinquent amount exceeds 20 percent of the borrower's working capital, the borrower becomes subject to a special credit and repayment regime, the specific conditions of which are not known. The ultimate sanction is the refusal of credit and, at times, even the replacement of the trust or enterprise director. The special credit regime is also applied whenever a trust or its branch (enterprise) stockpiles unneeded inventories; procures materials for production without guaranteed outlets for the output; undertakes a construction program without adequate financial provisions; increases its obligations; or suffers a worsening of its financial condition for any other reason. Interest costs in excess of those planned lower the economic organization's income and, under the prevailing incentives system, also reduce the funds available for the payment of wages, salaries, and bonuses. Loan delinquency and the associated penalty interest rate, therefore, often bring about the reduction or elimination of bonus payments and, 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.