Bulgarian National Bank Overhauls Regulations Prepping for Eurozone Entry

Business » FINANCE | November 21, 2023, Tuesday // 13:50
Bulgaria: Bulgarian National Bank Overhauls Regulations Prepping for Eurozone Entry Photo: Stella Ivanova @novinite.com

A significant shift is on the horizon for Bulgaria's financial landscape as the Bulgarian National Bank (BNB) gears up for its integration into the Eurozone by January 1, 2025. The impending transition will be accompanied by an entirely revamped Law on the Bulgarian National Bank, now open for public discussion via the government's Portal for Public Consultations.

This transformation signifies a departure from the existing monetary policy framework established in 1997. The proposed new law aims to lay the groundwork for a distinct monetary policy regime aligned with the country's integration into the Eurozone.

Key innovations outlined in the draft law encompass comprehensive regulations surrounding the status and management of the euro as the official monetary unit within Bulgaria. Details include specifications on the design, issuance, withdrawal, replacement, and reproduction of euro banknotes and coins. Additionally, the BNB will gain authority to issue various categories of euro coins, including circulation, commemorative, and collector coins made from precious metals and copper, along with determining their design and technical characteristics.

The legislation delineates the BNB's responsibilities in overseeing the production and control of euro banknotes, coins, and reserves within the country, including the preservation, storage, and destruction of euro banknotes and coins.

Furthermore, the proposed law introduces revised guidelines for the investment of BNB reserves, expanding the scope to include instruments with slightly higher credit risk but offering increased profitability potential.

With Bulgaria's imminent accession to the currency union, the country is set to fulfill its commitment to contribute fully to the subscribed capital of the European Central Bank (ECB). This entails an additional financial contribution from Bulgaria to reach the subscribed capital, showcasing the country's dedication to the union.

While the BNB's fundamental organizational structure remains unchanged, the new law outlines stringent criteria for individuals seeking employment within the institution, barring those holding specific political or commercial affiliations from taking up roles within the central bank.

As Bulgaria paves its way into the Eurozone, these legislative changes signify a strategic alignment of financial policies and regulations in preparation for a seamless integration.

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Tags: Bulgarian National Bank, Eurozone, BNB, legislative

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