Bulgaria’s history over the 20th century was characterised by upheaval, and the history of the lev reflects that. At half the value of the euro, the lev provides tourists and investors a cheaper entrance into Europe. If you want to buy Bulgarian lev, you might have a limited time. The country is slated to join the euro eventually, but having said that, the process has been continually postponed and could still be a long ways off.
- Bulgarian Currency Symbol: лв
- Bulgarian Lev Currency Code: BGN
- Coins: 1, 2, 5, 10, 20, 50 stotinki, 1 lev
- Bulgarian Lev Banknotes: 2, 5, 10, 20, 50, 100 leva
- Bulgarian GDP (nominal): $57.596 billion (75th)
- Mint: Bulgarian Mint
In archaic Bulgarian the word ‘lev’ means lion. In 1881 the lev became Bulgaria’s currency and was pegged in equal value to the French franc. Notes issued were backed by either silver or gold until in 1928 when a new standard was introduced valuing 1 lev at 10.8695 mg of gold.
During the beginning of the Second World War the lev was tied to the German Reichsmark at a rate of 32.75 leva to 1 Reichsmark. Following the Soviet occupation in 1944 the lev was pegged to the rubble at a rate of 15 to 1. A series of pegs to the USD followed shortly thereafter eventually reaching 143.25 leva to 1 USD in 1947.
Out of control inflation necessitated the introduction of a second lev in 1952 at a rate of 1 new to 100 old and the currency was revalued against the dollar to a rate of 6.8 lev to 1 USD. Just 10 years later the third lev replaced the second this time at a rate of 10 to 1. This third iteration of the lev officially exchanged against the USD at a rate of 1.17 to 1, but due to communist exchange restrictions the black market rate was closer to 10 to 1.
The fall of communism led to unsustainable levels of inflation and currency devaluation. To achieve the monetary stability, Bulgaria needed to rebuild their economy and introduced a fourth lev in 1999, pegged to the Deutsche mark at a rate of 1000 to 1.
Bulgaria joined the EU in 2007 and has made it clear that they intend to adopt the euro. The usual process requires that the country must adopt the European exchange rate mechanism for two years prior to officially adopting the euro. So far, however, the process has been delayed and Bulgaria has yet to join the ERM.
Notes and Coins
The latest incarnation of the lev released coins in denominations of 1, 2, 5, 10, 20 and 50 stotinka in 1999. In 2002 a 1 lev coin replaced the 1 lev note and in 2015 a 2 leva coin replaced the 2 leva note. The 1, 2, 5, 10, 20 and 50 stotinka coins all feature 12 stars symbolising Europe on the obverse with the name Bulgaria and an image of the Madara Rider – an early medieval monument – on the obverse. The 1 lev coin features a graphical pattern of two crossing lines on the obverse and the country name and saint Ivan Rilski – a famous Bulgarian hermit – on the reverse.
1, 2, 5, 10, 20 and 50 leva banknotes were introduced in 1999 with 100 leva notes added in 2003. Since their introduction the 1 lev note has been replaced in common usage by a coin and the 2 leva note is also being phased out. The 5 leva note features painter Ivan Milev on the obverse with paintings by the artist on the reverse. Petar Beron – a famous educator – is featured on the 10 leva with astronomical instruments on the reverse. Stefan Stambolov – a founder of modern Bulgaria – appears on the obverse of the 20 leva note with Orlov most and Lavov most – famous Bulgarian bridges – on the reverse. Pencho Slaveykov – a poet – is on the obverse with his poems on the reverse of the 50 leva note. Aleko Konstantinov – a Bulgarian writer – is featured on the obverse of the 100 leva with his work “Uncle Ganyu” on the reverse.
From the Second World War onwards, Bulgaria and Bulgarian currency had a dramatic history characterised by invasions, occupations and inflation. The lev was revalued many times over the 20th century, against the Reichsmark, against the ruble, and against the USD.. Despite not yet subscribing to the ERM the lev is pegged to the euro at a rate of 1.95583 to 1. Being tied to the euro has meant that the lev has fluctuated against the USD at a similar rate.
1 USD is currently (11AM, May 6 2016) valued at 1.7118 BGN
1 CAD is currently (11AM, May 6 2016) valued at 1.3244 BGN
The end of communism led to serious upheaval in all aspects of the Bulgarian economy and society. So called ‘shock therapy’ in the 1990’s led to a steep decline in industrial and agricultural production. Bulgaria’s economy expanded significantly following this shock therapy and the country posted significant growth until the financial crisis of the late 2000’s. In 2009 the country contracted by 5.5%, industrial output fell 10%, mining fell 31% and metal production fell 60%. Just a year later in 2010 the country returned to positive growth.
Bulgaria now has a burgeoning market economy in which the private sector makes up more than 80% of GDP. Relative to the rest of Europe, wages and GDP per capita remain low while the informal economy remains large, amounting to 32% of GDP. Despite this, low corporate and personal tax, close ties to the EU, natural resources, a low exchange rate and agricultural exports make Bulgaria an enticing investment opportunity.
Bulgaria’s resurgence following the fall of communism was hampered by the financial crisis but the country retains strong growth potential – as long as it can reduce corruption and incorporate the informal economy. With a low exchange rate almost half that of the euro, travellers and investors alike may want to buy Bulgarian lev and make the trip to southeastern Europe.
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