Bulgaria and the euro: 86% of leva cash withdrawn from circulation

As of February 23, a total of 86 per cent of leva banknotes and coins is out of circulation, leaving about 4.4 billion leva, the head of the euro mechanism coordination centre, Ivan Ivanov, told a news conference.

Bulgaria adopted the euro as its currency on January 1 2026, and following the January temporary dual circulation period in which euro and leva both were legal tender in Bulgaria, as of February 1 only the euro is legal tender.

Caretaker Finance Minister Georgi Klisurski, speaking at the weekly briefing, stated the caretaker cabinet’s commitment to the introduction of the euro.

“The introduction process should not be associated with speculative price increases. We will not allow it,” Klisurski said.

The head of the National Statistical Institute (NSI), Atanas Atanassov, told Bulgarian National Radio on February 23 that inflation in Bulgaria is comparable to that of the other euro zone member states.

The final data on inflation in the EU will be published in a few days, Atanassov said.

“So far we have flash inflation for the euro zone countries and we are only 0.6 per cent higher in inflation than the euro zone average,” he said.

The most serious price increases, measured by statistics, are in personal care services, restaurants and fitness centres – all sectors that are subject to frequent inspections by the National Revenue Agency and the Consumer Protection Commission.

The NSI does not assess the contribution of each good or service, Atanassov said.

He said that there is a trend towards an increase in income, significantly higher than inflation, which in turn provides an incentive to increase prices, especially in the area of services.

Food prices, especially fruits and vegetables, are also noticeably up, he said.

Petar Ganev, senior research fellow at the Institute for Market Economics, told bTV on February 23 that it is expected that between two and three billion leva will remain outside the banking system – saved “in mattresses”, lost or simply held on to by the public.

A similar process had been seen countries that have adopted the euro.

The data show monthly inflation of around 0.6-0.7 per cent in January, with the growth in services – restaurants, hair salons and others – being more noticeable (around 1.6 per cent), Ganev said.

“There, rounding is easier. In large chains and with mass consumption goods, a similar effect is almost not seen,” he said.

Annual inflation is slowing to about 3.5 per cent, the reason being the high base from the beginning of last year, when there was a serious price shock due to increases in VAT and utilities, Ganev said.

Lyubomir Karimanski, a member of the governing council of central Bulgarian National Bank (BNB), told Nova Televizia on February 21 that he personally feels a rise in prices, especially in the service sector.

Karimanski said that the most serious increase is observed in the restaurant sector, as well as other labour-related sectors, the value of which cannot be calculated with accuracy.

“Prices in restaurants are comparable to European ones, sometimes even higher,” he said.

Karimanski rejected the idea that the appreciation was solely due to expectations of euro adoption. “I didn’t say it was because of the euro. In my opinion, it’s complex,” he said.

BNB will for an indefinite period exchange leva banknotes and coins for euro, free of charge, at the official fixed exchange rate.

Until June 30 2026, commercial banks will exchange leva banknotes and coins for euro at the official exchange rate, free of charge, with no limit on the quantity. However, for amounts of more than 30 000 leva, three days advance notice is required. After that date, commercial banks will be entitled to charge for the service, if they choose to do so.

(Photo: Clive Leviev-Sawyer)