Recent Developments in the Soviet Union

I would like to discuss the monetary and banking situation in my country. The last few years have witnessed quite a number of sweeping changes in the Soviet economy. These changes, including the decentralization of decision making, have substantially contributed to inflationary pressure. According to estimates by the State Statistical Bureau, inflation was 7% percent last year. This figure includes both the actual price rise and a computed element measured by shortages of consumer goods in the shops (so-called "suppressed inflation"). One can expect that the trend will accelerate in the year to come, given the reforms which have to be introduced within the plans of transition to a market-oriented economy. In this context the necessity of enhanced power for the State Bank becomes exceptionally vital to influence these developments. Adapting to market conditions makes it inevitable to elaborate and monitor a new type of monetary policy.