The Bulgarian lev is the official currency of Bulgaria, and its code in the international money markets is BGN. The currency derives its name from the Bulgarian term “lev,” which loosely translates to “lion.” The Bulgarian lev is made up of subunits known as stotinka, where 100 stotinka is equivalent to one Bulgarian lev. The government institution mandated in the issuance of the currency is the Bulgarian National Bank. The Bulgarian lev has been issued in four series since it was first adopted in 1881.
The first lev was the earliest installment of the currency and was issued in 1881, with parity value with the French franc. The first lev was issued in banknotes as well as coinage with a gold standard. The first lev coins were minted in gold and silver with specifications similar to those of the Latin Monetary Union until 1916, when silver was replaced by zinc, aluminum, and cupro-nickel coins. During World War II, the first lev was pegged to the German reichsmark, where 1 reichsmark was equivalent to 32.75 leva. In 1944, as a result of Soviet occupation, the lev was pegged to the Soviet ruble with a valuation of 1 ruble to 15 leva. After the Soviet occupation, the currency was pegged to the US dollar.
Increased inflation during and after World War II led the government to implement currency reforms designed to curb the devaluation of the lev. The second installment of the lev was issued in 1952 in reaction to the inflation, and 1 new lev was equivalent to 100 old lev. This new lev was pegged to the US dollar where 1 US dollar was equivalent to 6.8 lev during its adoption. The Bulgarian National Bank issued new coins and banknotes of the second lev with coins being minted in 50, 25, 20, 10, 5, 3, 1 stotinki and 1 lev denominations, with the obverse of coins featuring the state emblem. Banknotes were issued in 200, 100, 50, 25, 5, and 3 leva denominations, and a 500 leva banknote was printed but never issued.
The currency experienced its third redenomination in 1962 when the Bulgarian National Bank issued the third installment of the lev, with one new lev being equivalent to 10 second-installment lev. The third lev was abbreviated in the money markets as BGL, and its exchange rate was 1 US dollar to 1.17 Bulgaria lev. The currency faced high inflation after the fall of the Eastern Bloc in the late 20th century leading to the lev being pegged to the German deutsche mark and led the Bulgarian National Bank to issue large-denomination banknotes.
Due to the increasing inflation of the lev, the Bulgarian National Bank rolled out a fresh and most-recent denomination of the lev, issuing the fourth installment on July 5, 1999, which replaced the third level at a value of 1000 old lev: 1 new lev, with one lev being equivalent to one German deutsche mark, the currency on which the new lev was pegged.
Adoption of the Euro
Bulgaria gained EU membership in 2007 and began setting up policies to enable it to adopt the euro. However, the global recession and eurozone crisis made the country reconsider its intentions to adopt the euro, which elicited mixed reactions from Bulgarian citizens.