The History of the Bulgarian lev (BGN)

The Bulgarian lev (BGN) was independent for only 7 years - from March 1990 to March 1997. During this period, it was not pegged to any other currency, silver, or gold. Ironically, today marks the anniversary of the Bulgarian lev’s introduction. Let’s look at the relatively short but turbulent 145-year history of the lev—and Bulgaria’s early attempt, just after gaining independence, to join the then-existing monetary union, the Latin Monetary Union.

The Bulgarian Lev (BGN) is the official currency of Bulgaria. It is subdivided into 100 stotinki (stotinka is the monetary subunit, equal to one hundredth of a lev). The lev weighs five grammes and has a volume within it of 4 grams and 175/1000 pure silver. Bulgarian coins were introduced in gold, silver, and copper.

With the adoption of the Coinage Act 145 years ago, Bulgaria effectively established its national currency—the lev—which was pegged to the strong French franc at the time. The first coins minted were copper. The oldest known coin, a one-stotinka piece from 1883, is in possession of numismatist Todor Dobrev.

Todor Dobrev, numismatist: "They are my commodity that I buy. We used to buy them from the Bulgarian National Bank here in the city centre. Silver five-lev coins were sold for five leva, meaning their face value matched their actual value. Now they issue 20-lev coins that sell for 250 leva."

In 1882, the first silver coins were minted in Russia, and in 1885, Bulgaria printed its first banknotes in denominations of 20 and 50 leva, backed by gold. The abundance of silver rubles in circulation was one of the key drivers for the creation of the Bulgarian lev. At that time, Bulgaria attempted to join an existing monetary union, explains the country’s only professor of economic history.

Prof. Pencho Penchev, Head of the Department of Political Economy, UNWE:
"According to this law, Bulgaria adopted a bimetallic standard, under which both gold and silver were legal tender. Many believe that with the creation of the lev, Bulgaria joined the Latin Monetary Union. In fact, Bulgaria only tried to imitate the Latin Monetary Union—it never officially joined. What we now understand as the lev is fundamentally different—both economically and in appearance—from its original form. Even before liberation, some Bulgarian church communities attempted to mint their own coins. Some of the prominent Bulgarian statesmen, such as Stefan Stambolov, were against it being called a lev, and wanted it to be called a franc."

Initially, Bulgarians were reluctant to trust the first printed banknotes due to the bad experience with the Ottoman Empire’s paper money, the so-called kaimé. In the years leading up to the Balkan Wars, the lev reached a peak of stability, backed by a real gold standard. Numerous reforms followed, and more came with the political transition in the 1990s.

Prof. Pencho Penchev, Head of the Department of Political Economy, UNWE:
"This was arguably the only time when the lev was truly independent—whatever 'independent' means in the world of finance and monetary policy."

On February 1, 1991, the government lifted price controls on a wide range of goods. This led to Prime Minister Dimitar Popov’s now-famous appeal: “For God’s sake, brothers, don’t buy!”

Dimitar Popov, Prime Minister (1990-1991): "The current prices of many goods are unrealistic. The state is covering much of the cost, but it will no longer be able to do so. The full cost must be borne by the consumer."

(Archive audio)
"I’m just desperate. My husband and I have been waiting in line since 6 a.m., looking for butter, looking for something to buy so we can eat. There’s nothing to eat."

The country soon faced a phenomenon: more zeros, but less purchasing power. The Bulgarian National Bank rushed to issue new high-denomination bills—including a 50,000-lev banknote.

Prof. Penchev:
"After the political changes, Bulgaria experienced accelerating inflation, culminating in hyperinflation in 1996–1997. When a currency falls into the wrong political hands, nothing good can come of it. The painful memory of hyperinflation still lingers for many. At one point, I managed to buy a dollar for 3,000 leva—and I’ve kept it to this day."

In 1997, the Currency Board was introduced. The lev was first pegged to the Deutsche Mark, and later to the euro.

(Archive audio)
"I have no idea what this Currency Board is. Will it save the country or not..."

Two years later comes the denomination of the lev. New banknotes were put into circulation. Thus, in the 145-year history of the Bulgarian lev there have been nearly 30 issues of banknotes. And the 1999 issue is about to remain the last. Prof. Penchev believes that the answer lies in history:

"History has the answer. If we lie to ourselves a little less and trust each other a little more, the type of currency we use to transact won’t matter as much. Let me quote Petko Slaveykov, who said during the debate about creating a Bulgarian currency: ‘Look, colleagues, when it comes to money, we all know what money is—but when it comes to making money, let’s listen to the experts.’ If we lie to ourselves a little less and believe a little more, we’ll worry far less about what currency we use to make our payments."