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Economic problems



HISTORY OF CZECHOSLOVAK CURRENCY.

The growing acceleration of reform thinking has become the growing economic problems, which have manifested themselves particularly clearly even with the continuing directive of central management in the monetary and financial areas. Above all, economic relations with foreign countries and the continuing isolation of the production structure, price and wage relations and the overall economic order from rapid changes in world events have caused tensions in the foreign exchange area with very negative effects on internal monetary conditions. Money issuance entered a markedly inflationary trend. The main inflationary factor was the high increase in inventories in enterprises, especially the so-called work-in-progress, to which wages were paid, without being counteracted by a corresponding increase in the supply of goods and services. The same effect was still due to the problematic growth of unfinished capital construction. The structure of production and its scope did not correspond to demand, especially export interests and needs. The inefficiency and recklessness of economic development in a centrally planned economy have necessitated new economic reforms. As part of the reform attempts, preparatory work on the reform of Czechoslovak banking was also started in 1988. However, the political-ideological limits were insurmountable in preparing for changes in the economy. The fundamental formation of the modern banking system was made possible only in November 1989.
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