ECB and Bulgarian National Bank set up swop line to provide euro liquidity

The European Central Bank (ECB) and the central Bulgarian National Bank have agreed to set up a precautionary currency agreement (swop line) to provide euro liquidity, the ECB said on April 22.

Under the new swop line, the Bulgarian National Bank will be able to borrow up to two billion euro from the ECB in exchange for Bulgarian leva, the ECB statement said.

The maximum maturity for each drawing will be three months. The swop line will remain in place until December 31 2020, unless it is extended.

Bulgaria is preparing for participation in the exchange rate mechanism (ERM II), which is a prerequisite for an EU country to join the euro zone, the ECB said.

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