In Poland you could exchange hard currency like US Dollars and German Marks for PeKaO bony (like coupons from national bank) and then use those in stores like P

In Poland you could exchange hard currency like US Dollars and German Marks for PeKaO bony (like coupons from national bank) and then use those in stores like Pewex to buy everything. Later it was streamlined like all at one window in the same store or even at check-out. I suspect that is what your father meant by diplomatic stores. The gov wanted hard currency so that it could import from outside the iron curtain, regular folk had no means outside of black market and family and friends living in the west to gain hard currency, so the stores were for tourists, foreign scholars, and diplomats essentially. Another interesting situation in Poland was fuel rationing. Many things were rationed, but if you were a foreigner entering the the country in the mid '80s you could by coupons for X liters of gasoline. Then you did not even have to wait in the long lines at fuel stations. It was not unheard of people buying stolen fuel under a bridge or in a forest. Most stores were bare because when inventory came-in it was quickly purchased. Since the prices were controlled people had enough zloty but not enough to spend it on so buying items like paper was desirable because later you could barter it for items you needed on the black market.