Financial and business news from Bulgaria

BNB chief: Bulgaria is waiting for great days if...

The Governor of the Bulgarian National Bank Dimitar Radev participated in a discussion within the annual Euromoney Forum for Central and Eastern Europe.
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Together with other central bank leaders from the region discussed the different approaches to joining the euro area with a focus on participation in the Exchange Mechanism (ERM II) and preparation for adoption of the single currency, BNB reported.

Dimitar Radev presented Bulgaria's backstory and strategic motivation for the inclusion of the Bulgarian lev in ERM II as a key step on the road to the euro.

“The successful functioning of the monetary regime of Bulgaria, based on the currency board with the fixed rate to the euro as a reserve currency, predetermines the logicality of the process of swapping BGN with euro. Our analyses clearly show that the adoption of the euro in Bulgaria will represent a smooth process”, Radev said.

According to the Governor of BNB, the adoption of the euro will accelerate the real convergence of the Bulgarian economy and will make a key contribution to the growth and well-being in the country.

“Even the process of preparing for the euro disciplines and stimulates the good policies that are necessary to achieve a high degree of convergence of the country's economy to the euro area even before its accession”, he stressed, adding that the euro does not guarantee in itself Sustainable convergence.

Therefore, Bulgaria should continue with prudent macroeconomic policies to be pursued by targeted and effective institutions.

In the course of the discussion Dimitar Radev also touched on issues related to Bulgaria's membership in the Banking Union, carried out simultaneously with the inclusion in ERM II. The Governor talked about the successful establishment of the close cooperation of the Bulgarian National Bank with the European Central Bank.

“Bulgaria participates in the Banking Union fully with the euro area countries. Thus we practically joined an institution of the euro area even before the introduction of the euro”, added Radev.

He shared that the first months of participation in the Banking Union have brought concrete benefits, for example, related to supervisory capacity and expansion of access to information.