Petia Dimitrova: We will enter the eurozone with the current interest rates on loans and deposits
Bulgaria will officially switch to the euro in less than a month. Is everything ready in the banking sector for the final stretch?
The banking system is entering the eurozone fully prepared, stable, and competitive. The sector also plays an important communication role—banks are people’s most direct contact with the euro. We guarantee fair and transparent communication with customers, suppliers, and partners. Through digital platforms, contact centers, and consultations in branches, customers receive timely information and answers to their questions. This is key to building trust and overcoming concerns about change.
I believe that with the efforts of all of us – institutions, businesses and society – Bulgaria will take this step confidently, responsibly and successfully.
Are your business customers, especially small and medium-sized enterprises, ready?
Communication with our customers began at a very early stage and has gone through various phases because our main goal is to make the transition easy and smooth for everyone. When we say we are ready for the change, we mean exactly that we are committed not only to the technical implementation of the conversion, but also to the entire experience we will go through together to feel and appreciate the historical significance of this moment. We are also paying close attention to our corporate clients, who have received all the necessary instructions and advice from us on what to do to be prepared for the change.
What remains hidden from most people is logistics. Behind the introduction of the euro lies a huge operation – literally tons of Bulgarian money must be withdrawn and replaced with euro banknotes and cents. How big is this operation?
The scale is truly enormous. At the end of October, the money in circulation was 25.8 billion levs. The number of banknotes in circulation is over 500 million, weighing over 600 tons. The number of coins in circulation is over 3.3 billion, and their weight is over 10,000 tons. If we loaded them onto trucks, we would need over 400 trucks, and the length of the convoy would be 7 kilometers.
We will have to replace the levs with euro banknotes weighing 520 tons and coins weighing over 3,600 tons. These figures confirm that we are talking about extremely complex logistics that require very precise planning.
How exactly will it happen—from the BNB’s warehouses to cash registers and ATMs across the country? How long will it take to replace all the cash, and how will the risk of counterfeit banknotes or abuse be controlled during the transition period?
Since November 1, the so-called initial loading period has been underway, during which the BNB supplies banks with euro banknotes and coins. For their part, banks provide part of this cash to merchants through special agreements so that the latter can give change in euros at the beginning of next year. Until then, this money is not an official means of payment, and merchants are required to keep it separate and not use it for payments. From the beginning of December, merchants and citizens will be able to purchase so-called starter kits with euro coins bearing the national side from bank branches and Bulgarian Post offices. The value of a kit for legal entities is BGN 200 and contains coins worth EUR 102.3, which is the same amount as the fixed exchange rate. The cost of a kit for citizens is BGN 20 and contains 42 coins worth EUR 10.23.
The actual exchange of banknotes and coins will begin at bank branches and post offices at the beginning of next year. To ease the burden in the first days of the year, our advice to customers is not to rush to exchange their money immediately, because we will be able to continue to pay with levs throughout the month of January. Another piece of advice we give to customers is that if they hold larger amounts of cash, they should deposit them into their bank accounts before the end of the year, and we will convert them free of charge and automatically on December 31. To facilitate this process, we are running promotional campaigns until the end of the year to deposit levs into accounts free of charge. In recent months, more customers have been taking advantage of this opportunity, and as a result, the money in circulation has decreased by more than 1/6, or more than BGN 5 billion, since the beginning of the year. In this respect, we are repeating what happened in Croatia in the year before the introduction of the euro, where 40% of the cash in circulation was exchanged or deposited in banks in the months before January 1.
Regarding the risk of fraud and abuse, I would like to remind all customers that levs will only be exchanged at bank branches and Bulgarian Post offices. I urge people to be vigilant and not to trust anyone who offers to exchange money elsewhere or in any other way.
Can we calculate how much the entire operation has cost the banking sector so far and what effect the repeated postponements have had?
Over the past few years, banks have invested over BGN 400 million in system improvements, employee training, and communication to ensure a free, smooth, and secure transition to the euro for both businesses and citizens. We see this as an investment in the future because, without a doubt, this is a step in the right direction for Bulgaria. The most convincing evidence is the history of the countries that have already made this transition.
Are there any particularities that people should be aware of in the final hours of 2025 and the first hours of 2026? Will all ATMs be loaded with euros, will it be possible to withdraw immediately after midnight, is it possible that there will be any interruptions or delays in payment systems, etc.?
ATMs will be loaded with both levs and euros on December 31. This will ensure that until the last hours of this year, customers will be able to withdraw levs, and from January 1, 2026, all ATMs will dispense only euros. During the holidays, customers will be able to use their bank cards and pay with them at POS terminals.
Do you expect the transition to the single currency to have any impact on interest rates on deposits and loans in 2026? In general, what direction do you predict their dynamics to take?
We have some of the lowest interest rates in the eurozone countries. And since I am often asked this question, I would like to emphasize that we will enter with these rates and will be as open as possible so that people can really understand the benefits, the situation we are entering, and the fact that we are an extremely well-capitalized, liquid, and exceptionally stable banking system.
After joining the eurozone, banks will be exempt from minimum reserve requirements, and on the other hand, they will see a decrease in revaluation income and an improvement in the capital treatment of euro-denominated government securities in their balance sheets. What will be the final effect on the sector’s performance?
Indeed, banks in the eurozone have a 1% minimum reserve requirement, while in Bulgaria this percentage is currently 12%. After January 1, this will free up BGN 16 billion in liquidity, which can be invested or left with the ECB, for which banks will receive interest. This will largely cover the loss of revenue from currency transactions, but it cannot compensate for the costs incurred for the introduction of the euro, which, as I already mentioned, amount to over BGN 400 million for the entire sector.
What do you expect from the sector and the economy in 2026 at all?
Undoubtedly challenging, and that is why it is shaping up to be my favorite! In the coming months, banks will focus on the new opportunities that the eurozone offers – not only for the sector itself, but also for households and businesses, which it will continue to support as a strategically trusted partner. I have emphasized several times that we are not just talking about the introduction of a new currency. We are talking about a new stage in the development of the Bulgarian economy – with deeper integration, greater competitiveness, and more sustainable growth.
