site.btaCentral Bank Governor: Euro Changeover Bill Nearly Complete

The bill on the euro changeover is at the final stage of preparation, Bulgarian National Bank (BNB) Governor Dimitar Radev said in a BTA interview on the sidelines of the annual meeting of the World Bank Group and the IMF in Marrakech, Morocco. Radev noted that following the IMF's call for commercial banks to set aside part of their profits for reserves and buffers, BNB was one of the first central banks to do that.

He also said that following the European Central Bank's (ECB) approval of the BNB bill, it is now to be passed by Parliament, which he expects to happen by the end of the year.

Following is the full text.

Q: Will Bulgaria participate in the IMF quota increase?

A: At this stage Bulgaria is actively participating in the discussion on the 16th IMF quota review. The member states are expected to reach a consensus on this issue by the end of this year.

Q: What do you think should be the objective of the Bulgarian Budget 2023 - fiscal stability or measures against inflation?

A: The two complement each other: they don’t clash. Both should be achieved both in the context of 2023 and in the drafting and implementation of the 2024 budget.

Q: Following the European Central Bank's support for BNB, what BNB-related legislation still need to be adopted and/or agreed?

A: The most important piece of legislation from the central bank's point of view is the BNB Bill, which has already received the ECB's support. I expect it to be approved before the end of this year. Next is the bill on the euro changeover, which is the result of an interdepartmental effort and which is at the final stage of preparation.

Q: The IMF urged banks in Europe to set aside as buffers or reserves part of their higher profits linked to increased interest rates on loans. Is the BNB planning any measures in this regard?

The BNB was one of the first central banks to implement such measures. Let me remind you about our decisions to increase banks' minimum reserve requirements and the level of the countercyclical capital buffer. We stand ready to impose additional measures if necessary.

Q: How do you assess the current level of lending in the country? Are additional measures needed to cool it down?

The above measures, as well as the policy to accelerate the transposing of the ECB policy, are aimed, among other things, at containing credit expansion and the risks associated with it. Our aim is to implement these measures in a way that will not stagnate the economy.