Emerging Markets Rates and Currencies Handbook

Bulgaria (BGN - Bulgarian Lev) Citi in Bulgaria Citi has been present in the country since 1998, operating as a representative office until 2000 when it became a fully operational branch. Citi is a corporate and investment bank in Bulgaria, serving its global clients with its presence in Bulgaria, and select local corporates, as well as the public sector. Market Overview The Bulgarian lev is pegged to the EUR at rate 1.95583 under a currency board arrangement. The peg has been in place since 1997. The main currency pair traded is EURBGN as the EU is the country’s key economic partner and transactions are made for business purposes primarily. Onshore hedges, cash flow and balance sheet, are permissible with no restrictions. All EU-wide derivatives trading rules and regulations apply. No market for BGN interest rate swaps and options exists. Convertibility The Central Bank is obligated to buy and sell onshore with no limitations EUR against BGN (in spot transactions with max. 0.5% variance from the official rate 1.95583). The Central Bank quotes up to spot tenors and does not apply spread to commercial banks based in the country. 69