Bulgarian Lev has been pegged to Euro since 1999

Bulgarian National Bank (BNB) has been operating under a currency board arrangement (CBA) regime since 1997. First, it was pegged to the Deutsche Mark, then to the Euro. They also redenominated their currency from Old Bulgarian Lev (BGL) to New Bulgarian Lev (BGN).

Under CBA, BNB's monetary liabilities must be fully covered by foreign reserves. In other words, if Bulgaria's Central Bank wanted to increase the base money supply of their national currency (i.e. monetary liabilities on BNB's balance sheet), they needed to foreign reserve assets backing them up at a fixed rate of 1 EUR ≈ 1.96 BGN. In practice, ≈90% of BNB's reserves were Euro-denominated, which makes sense, since BGN is pegged to the Euro.

For those claiming that by adopting the Euro as its official currency on January 1st 2026 Bulgaria has given up its monetary sovereignty - how exactly? BNB has been extremely limited in pursuing discretionary monetary policies since 1997.