SOFIA (Bulgaria), January 27 (SeeNews) - Bulgaria will maintain its currency board system pegging the lev to the euro until the country joins the euro area and adopts the common currency, the finance ministry said in response to local media speculation.
On January 23, the head of the parliament's budget committee, Menda Stoyanova, has submitted a draft addendum to Article 29 of the Law on the Bulgarian National Bank (BNB) that sets the fixed exchange rate of the lev against the euro, the finance ministry said in a statement on Sunday.
The draft addition does not call into question the current fixed exchange rate regime but rather seeks to ensure compliance of domestic regulatory framework with the European regulatory framework governing the administrative process and operational procedures for the approval of exchange rates in the Exchange Rate Mechanism (ERM II), the preparatory stage for adoption of the euro, the finance ministry said.
"This compliance is mandatory for joining he Exchange Rate Mechanism," the finance ministry said, stressing that the government and the BNB have repeatedly stated that the fixed exchange rate regime will be kept until Bulgaria adopts the euro.
Over the past few days, local media has speculated that the proposed addendum to the Law on the BNB could potentially open the way for a change in the fixed exchange rate regime. The lev is pegged at 1.95583 per euro under the currency board system.
The finance ministry, the BNB and the European Central Bank support the draft legislation, the ministry said.
In October, finance minister Vladislav Goranov said that Bulgaria will possibly conclude all processes needed for its accession to the ERM II and the Banking Union of the EU by the end of April 2020.