March 19 (SeeNews) - Bulgaria's central bank unveiled on Thursday a set of measures worth 9.3 billion levs ($5.1 billion/4.8 billion euro) that are intended to maintain the stability of the banking system amid the coronavirus disease (COVID-19) pandemic.
At the same time, the measures also aim to strengthen the flexibility of the banking system in order to reduce the negative effects on both businesses and individuals stemming from the restrictions imposed on the economy because of the COVID-19 spread, the Bulgarian National Bank (BNB) said in a statement.
The main elements of the package are aimed at additional strengthening of the banks' capital and liquidity and include a 1.6 billion levs capitalization of the banking system's total profit volume; cancellation of the increases in the countercyclical capital buffer planned for this year and next with effect of 700 million levs ; increasing the liquidity of the banking system by 7.0 billion levs through reduction of the foreign exposures of commercial banks.
Furthermore, the central bank said that it applies additional measures aimed at ensuring the unimpeded functioning of the currency board system, the currency in circulation, payment accounts, and banking supervision.
"The BNB is in constant and active contact within the European System of Central Banks and the European Banking Authority to coordinate the adaptation and implementation of the pan-European banking regulatory framework," the central bank said, adding it is ready to take additional measures if they are required.
"At the same time, the BNB calls for refraining from proposals for administrative and legislative decisions that could have a devastating impact on the country's financial system," it said.
Earlier this week, BNB governor Dimitar Radev met with Bulgarian president Rumen Radev to discuss the challenges posed by the coronavirus pandemic on the country's banking system.
Following the meeting, the president's office issued a press release, in which it said Bulgaria's banking system has sufficient capital and liquidity reserves to cope with the impact of the coronavirus crisis. Backed by these reserves, banks in Bulgaria are able to apply flexibility and individual approach to their clients in order to reduce the negative effects of the restrictions imposed with the aim of limiting the spread of the coronavirus disease.
The crisis will affect borrowers in different ways and the strength of its negative effects on them will depend on their starting financial position and their sector profile, BNB governor Dimitar Radev was quoted as saying by the president's office.
Last week, Bulgaria's parliament backed a government proposal to declare a state of emergency until April 13, in order to enable the authorities to more efficiently fight the spread of the disease. Subsequently, the country ordered all stores except for pharmacies and food stores to shut down until further notice.
As of Thursday, there are 94 confirmed coronavirus cases in Bulgaria, including three deaths from the disease.
(1 euro = 1.95583 levs)