FT: Cash-Strapped Greeks Accepting Bulgarian Levs  

With banks in Greece closed since 29 June and cash withdrawals rationed at up to EUR 60 per day, the Bulgarian lev has gained the status of a ‘dependable and stable’ currency at shops, hotels and restaurants in northern Greece, the Financial Times has said.

“Many Greeks in the retail and leisure industry say it makes increasing sense to accept Bulgarian and Turkish money at a time when tourism, the country’s economic lifeblood, is under threat,” according to an article published by the FT on Thursday.

Greek hotel and shop owners in northern Greece say they accept Bulgarian levs because they can exchange them for euro at a fixed rate across the border in Bulgaria. They can also buy food in bulk for their business in Bulgaria, using the levs they had accepted in Greece, the FT says.

Bulgaria operates a rigid monetary mechanism called currency board that ties the levs in circulation to the level of foreign exchange reserves. The system was introduced in 1997 to halt hyperinflation, stave off economic collapse and bring in fiscal discipline. The lev is pegged at 1.95583 per euro under the system.

“For Bulgarians who lived through runaway inflation in the late 1990s, it is deeply ironic that their currency is suddenly viewed as dependable and stable in their richer southern neighbour, which joined the euro in 2001,” the article reads.

You can find the original FT article here.

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