BGN (Bulgarian Lev)

DEFINITION of 'BGN (Bulgarian Lev)'

The currency abbreviation or currency symbol for the Bulgarian lev (BGN). The Bulgarian lev is made up of 100 stotinki. The Bulgarian name comes from the archaic Bulgarian word "lev", which can be translated to mean "lion". BGN is expected to be replaced by the euro in 2012.

Also known as the "Bulgarian leva".

BREAKING DOWN 'BGN (Bulgarian Lev)'

The Bulgarian lev was first introduced in 1881 with a value equivalent to 1 French franc. Since then, the lev has been replaced three times. The first replacement came shortly after WWII finished, due to rampant wartime inflation. In 1952, the second lev replaced the original at a rate of 100 to 1. This new lev was pegged to the U.S. dollar at a rate of 6.8 lev to 1 U.S. dollar. This fell in 1957 to 9.52 lev. The lev was replaced again in 1962 at a rate of 10 to 1, setting the new U.S. dollar exchange rate at 1.17 lev to 1 U.S. dollar. Because the currency was not freely convertible to non-communist countries' currencies, the actual exchange rate (black market) was much higher.

After the fall of communism, the lev was pegged with the Deutsche mark (DEM) at a rate of 1,000 lev to 1 mark in order to stem inflation and currency devaluation. A third and final redenomination took place in 1999, with the current lev replacing the last at a rate of 1,000 to 1, making it equivalent to 1 mark. With the replacement of the Deutsche mark with the euro, lev's peg has effectively been set at 1.95583 lev = 1 euro, the Deutsche mark's fixed exchange rate with the euro.

RELATED TERMS
  1. Redenomination

    1. The process whereby a country's currency is recalibrated due ...
  2. Replacement Cost

    The cost to replace the assets of a company or a property of ...
  3. Currency Peg

    A country or government's exchange-rate policy of pegging the ...
  4. International Currency Exchange ...

    The rate at which two currencies in the market can be exchanged. ...
  5. Conversion Rate

    The ratio at which one currency can be exchanged for another. ...
  6. Replacement Rate

    The percentage of a worker's pre-retirement income that is paid ...
Related Articles
  1. Forex Education

    How Are International Exchange Rates Set?

    International exchange rates show how much one unit of a currency can be exchanged for another currency.
  2. Forex Fundamentals

    The Pros And Cons Of A Pegged Exchange Rate

    A pegged exchange rate occurs when one country fixes its currency’s value to the value of another country’s currency. But it has both pros and cons.
  3. Investing Basics

    Explaining Fixed Exchange Rates

    A government using a fixed exchange rate has linked the value of its currency to the value of another country’s currency, or the price of gold.
  4. Forex

    Top Exchange Rates Pegged To The U.S. Dollar

    From the end of World War II until around 1971, all countries in the IMF pegged their currencies to the U.S. dollar. Today, many still do.
  5. Term

    How Does a Currency Peg Work?

    When a government initiates a currency peg, it pegs its currency’s value to that of another country.
  6. Economics

    Explaining Replacement Cost

    The replacement cost is the cost you’d have to pay to replace an asset with a similar asset at the present time and value.
  7. Term

    Why Countries Keep Reserve Currency

    Central banks and financial institutions hold large amounts of foreign money as their reserve currency.
  8. Forex Education

    How Do You Make Money Trading Money?

    Making money in the foreign exchange market is a speculative process. You are betting that the value of one currency will increase relative to another.
  9. Economics

    Macroeconomics: Currency

    By Stephen Simpson For citizens of different countries to conduct trade, they have to buy and sell each other's currencies. The price of a nation's currency, expressed as an amount of a second ...
  10. Forex Education

    Dollarization Explained

    Find out how fledgling economies can find some stability in their currency and attract foreign investment.
RELATED FAQS
  1. How are international exchange rates set?

    International currency exchange rates display how much one unit of a currency can be exchanged for another currency. Currency ... Read Answer >>
  2. When and why did the euro make its debut as a currency?

    On January 1, 1999, the European Union introduced its new currency, the euro. Originally, the euro was an overarching currency ... Read Answer >>
  3. How does inflation affect the exchange rate between two nations?

    Understand how inflation can affect foreign exchange rates of a currency and how it is just one of many economic factors ... Read Answer >>
  4. What is foreign exchange?

    Foreign exchange, or Forex, is the conversion of one country's currency into that of another. In a free economy, a country's ... Read Answer >>
  5. Why do forex traders use a currency converter?

    All currencies are quoted in pairs - one country's currency against another country's currency. A currency converter is used ... Read Answer >>
  6. How do changes in national interest rates affect a currency's value and exchange ...

    Understand the role that changes in interest rates can play in determining the value and foreign exchange rate of a country's ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center