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On Extending The Currency Board Principle In Bulgaria: Long Live The Currency Board

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  • Hanke, Steve H.

    (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise)

  • Tanev, Todor

    (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise)

Abstract

The year 1997 was both the worst and best of years for Bulgaria. The year started badly. In February, Bulgaria’s hyperinflation peaked at the fantastic rate of 242% per month (Hanke and Krus, 2013). Then, things dramatically changed for the better. On July 1st, a currency board law was adopted, and the Bulgarian National Bank (BNB), specifically its Issue Department, began to operate under currency board rules. These rules required the lev to be fully backed by Deutschemark reserves (now euro reserves) and to freely trade at a fixed exchange rate with the Deutschmark (Hanke, 2016). With that, the lev became a clone of the Deutschmark, and good news followed.

Suggested Citation

  • Hanke, Steve H. & Tanev, Todor, 2019. "On Extending The Currency Board Principle In Bulgaria: Long Live The Currency Board," Studies in Applied Economics 140, The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise.
    • Handle: RePEc:ris:jhisae:0140
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    References listed on IDEAS

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    1. repec:cto:journl:v:20:y:2000:i:1:p:49-59 is not listed on IDEAS
    2. Hanke, Steve, 2016. "Remembrances of a Currency Reformer: Some Notes and Sketches from the Field," Studies in Applied Economics 55, The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise.
    3. Steve Hanke, 2002. "On dollarization and currency boards: Error and deception," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(4), pages 203-222.
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