Sunday, 17 May 2009

Bulgarian Leva Remains Pegged With Euro

Spanish Euros

Keeping Bulgaria’s currently pegged with the Euro is one of the wiser moves by Bulgaria's politicians, but then there really isn't any other alternative. Funny how these top-notch businessmen and politicians make out that it was a considered decision.

Without the Bulgarian Leva tied in with the Euro, Bulgaria would be in a currency free fall, which is the original reason for doing it. As for the Euro in Bulgaria in 2015, it is inevitable that the tarred brush of Europe smothers Bulgaria's currency that was named after a man who inspired Bulgaria's independence, rather ironic!

Bulgaria will keep its currency pegged to the euro until it joins the single currency bloc, Dimitar Kostov, deputy governor of Bulgarian National Bank said on Friday.

The Balkan country introduced the International Monetary Fund-prescribed regime in 1997 and pegged its lev currency at 1.95583 per euro after a financial and economic meltdown wiped out a third of its banks.
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'The currency board is here and will be here until we enter the euro zone,' Kostov told a briefing at the annual meeting of the European Bank for Reconstruction and Development.

'It (plays) a certain monetary policy role, it's not just about fixing an exchange rate.'

Bulgaria is heavily dependent on foreign cash to fund its current account gap and some analysts have said slowing economic activity and falling foreign investment could put enough pressure on the lev to force Sofia to devalue its currency.

Analysts do not expect the country to join the euro until 2015, a Reuters poll showed late last month.

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