Bulgarian currency board
E294565
The Bulgarian currency board is a monetary authority arrangement that strictly backs the Bulgarian lev with foreign reserves and maintains its fixed exchange rate, limiting the central bank’s ability to conduct independent monetary policy.
All labels observed (1)
| Label | Occurrences |
|---|---|
| Bulgarian currency board canonical | 1 |
Statements (47)
| Predicate | Object |
|---|---|
| instanceOf |
currency board arrangement
ⓘ
monetary regime ⓘ |
| anchorCurrency |
Deutsche Mark
ⓘ
surface form:
German mark
euro ⓘ |
| associatedWith |
disinflation in Bulgaria after 1997
ⓘ
fiscal discipline in Bulgaria ⓘ |
| backedBy |
foreign exchange reserves
ⓘ
highly liquid foreign assets ⓘ |
| backsCurrency | Bulgarian lev ⓘ |
| characteristic |
automatic adjustment of money supply to balance of payments
ⓘ
no discretionary monetary policy ⓘ strict rules-based framework ⓘ |
| classification | hard peg exchange rate regime ⓘ |
| constrains | lender of last resort function of the central bank ⓘ |
| country | Bulgaria ⓘ |
| distinguishedFrom |
conventional fixed but adjustable peg
ⓘ
independent floating exchange rate regime ⓘ |
| euroFixingEffectiveFrom | 1999-01-01 ⓘ |
| euroFixingRate | 1 EUR = 1.95583 BGN ⓘ |
| exchangeRateRegime | fixed exchange rate ⓘ |
| influencedBy |
Estonian currency board model
ⓘ
Lithuanian currency board model ⓘ |
| initialExchangeRate | 1 DEM = 1000 BGL ⓘ |
| introducedAfter | 1996–1997 Bulgarian financial crisis ⓘ |
| introducedOn | 1997-07-01 ⓘ |
| legalBasis | Law on the Bulgarian National Bank (1997) and subsequent amendments ⓘ |
| limits | independent monetary policy of the Bulgarian National Bank ⓘ |
| monetaryBaseCoverageRatio | approximately 100 percent or more ⓘ |
| monitoredBy |
European Commission
ⓘ
International Monetary Fund ⓘ |
| postRedenominationRate | 1 DEM = 1 BGN ⓘ |
| prohibits | central bank financing of government deficits ⓘ |
| purpose |
reduce inflation
ⓘ
restore confidence in the banking system ⓘ stabilize the Bulgarian lev ⓘ |
| redenominationEffect | 1000 old leva converted to 1 new lev ⓘ |
| redenominationYear | 1999 ⓘ |
| reduces | exchange rate risk for trade and investment ⓘ |
| region |
Eastern and Central Europe
ⓘ
surface form:
Central and Eastern Europe
|
| relatedTo | Bulgaria’s preparation for euro area membership ⓘ |
| requires | full reserve coverage of monetary base ⓘ |
| risk |
limited flexibility in responding to external shocks
ⓘ
potential banking sector vulnerabilities without full lender of last resort ⓘ |
| sector | monetary policy ⓘ |
| supports | macroeconomic stability in Bulgaria ⓘ |
| timeHorizon | intended to remain until adoption of the euro ⓘ |
| underAuthorityOf | Bulgarian National Bank ⓘ |
Referenced by (1)
Full triples — surface form annotated when it differs from this entity's canonical label.