The European Central Bank (ECB) and the Българска народна банка (Bulgarian National Bank) have agreed to set up a precautionary currency agreement (swap line) to provide euro liquidity.
Under the new swap line, the Bulgarian National Bank will be able to borrow up to €2 billion from the ECB in exchange for Bulgarian levs. The maximum maturity for each drawing will be three months. The swap line will remain in place until 31 December 2020, unless it is extended.
Bulgaria is preparing for participation in the exchange rate mechanism (ERM II), which is a prerequisite for an EU Member State to join the euro area.