Central Bank Head: Bulgaria Escaped the Global Crisis Unhurt

The Bulgarian National Bank governor has ambitiously stated that the country will not be hit by the global crisis due to the stability of the banking system.

“Despite the heavy global crisis all around the world, the Bulgarian economy and the citizens have and will escape unhurt,” Ivan Iskrov said after his meeting with Prime Minister Boyko Borisov and Finance Minister Simeon Djankov.

“Bulgaria's banking system is extremely well capitalized with the capital adequacy ratio standing at more than 17%. The banks stage good performances and have big enough buffers,” he added.

In his words the currency board regime is in very good state with its coverage in foreign exchange (FX) reserves standing at more than 211% and continuing to increase.

Iskrov stressed the decision of Standard & Poor's Ratings Services to lift its outlook on Bulgaria to stable from negative, citing the Eastern European nation's strong track record of prudent fiscal policy and low gross debt.

“This is a very good news, having in mind that the rating of most European countries is deteriorating at the moment,” Iskrov said.

Prime Minister Boyko Borisov commented that such positive assessments gives the country reason to believe it will successful “attack the eurozone”.

The country is on track to enter its currency in the pre- euro exchange-rate mechanism, a stability test before the switchover, by early next year.

Since 1997, Bulgaria has used a currency board system, which requires that lev in circulation be matched by foreign-currency reserves. The lev has been fixed to the euro as part of the system since 1999.

Bulgaria, the European Union’s poorest country, is going through its first recession in 12 years after a three-year lending boom stalled and foreign investment dried up.

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