Money in bank accounts will be automatically converted from leva to euros on the day of the introduction of the single European currency, says the head of the National Bank of Bulgaria (NBB), Dimitar Radev, in a document published in the Bulletin of the Association of Commercial Banks, Novinite reports.

All leva funds from current, savings, deposit and other bank accounts, as well as from other payment service providers, will be converted into euros free of charge, the Bulgarian official claims.

Two weeks before joining the euro, BNB will start supplying banks with euro banknotes and coins with the national image of Bulgaria in advance, said Dimitar Radev. In the same period, banks will start providing merchants and post offices in Bulgaria with euro banknotes and coins free of charge.

After the introduction of the euro, during the first six months, banks and post offices in Bulgaria will provide free exchange of banknotes and coins from leva to euros. After the end of six months – one year after the introduction of the euro, banks will be obliged to continue exchanging banknotes and coins from leva to euros, but commissions will apply.

A year after the introduction of the euro, the exchange of banknotes and coins from leva to euros and the possibility of applying commissions for these services will remain at the discretion of banks. The BNB will continue the free exchange of banknotes and coins from leva to euros for an indefinite period.

Dimitar Radev also noted that the political situation is the main risk for the adoption of the euro on the target date – January 1, 2024.

Analysts believe joining the euro zone would help Bulgaria, the European Union’s poorest member state, attract more foreign investment and get a better sovereign rating, which would reduce its debt financing costs. The neighboring country long ago decided to tie its national currency to the euro.

However, many Bulgarians fear that price manipulation during the transition to the euro could lead to higher prices.

A report by the European Central Bank, which analyzed the introduction of the euro in 2002 in 12 countries, found that “there is no evidence of a significant effect on prices at the aggregate level as a result of the changeover to the euro.”

Rating agencies Standard & Poor’s and Fitch, which assign Bulgaria the qualification of investment grade (-recommended for investment-no) “BBB”, assessed that joining the euro would be a positive element for Bulgaria’s rating.