Банкеръ Weekly

Briefs

INTERBANK TRADE IN EURO HAS BECOME RISK-FREE

The Bulgarian National Bank (BNB) has eliminated the currency differences in the trade in euro between itself and commercial banks. According to a decision of the central bank's Managing Board as of June 3, 2004, the BNB will be buying and selling the common European currency at an exchange rate of BGN1.95583 for EUR1. Until now the central bank was selling the euro at rates that could differ up to 0.5% from the fixed exchange rate. This created (although insignificant) risk of losses for commercial banks. The fixed exchange rate at which the BNB will be effecting trade in euro will slightly influence the clients of financial institutions. Banks might reduce the difference in prices at which they effect purchase and sale deals in euro with their customers. In order to prevent profiteering and frauds at exchange offices the Council of Ministers intends to amend the ordinance, regulating their operation, including a provision that their exchange rates cannot differ by more than 5% from BNB's quotations for the respective day. Thus, the Government hopes to deal away with the multiple frauds, whose victims were mainly foreign vacationers at Black Sea resorts, which became a huge problem for our leisure industry in 2002 and 2003.

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