AUGUST 2012 No 10 / 2012

> The domestic money market volumes in August

maintained the levels reached in July. Interest rates

remained at record lows, which led to some shift

towards the longer maturities (p.7).

> The euro stabilised in August, due to expectations that

the ECB will take soon additional measures to stimulate

economic growth.

> The high demand for registered compensation vouchers

continued in August (p.12).

DEBT MARKET

Benchmark yield curves in the euro area 01.08.2012 and 03.09.2012

-1

0

1

2

3

4

5

6

o/ndepo

1wdepo

1mdepo

3m depo

12m bill

3ybond

5ybond

7ybond

10ybond

instrument

ann

ual

yie

ld (

%)

01.08.2012

03.09.2012

Benchmark yield curves in Bulgaria 01.08.2012 and 03.09.2012

00.5

11.5

22.5

33.5

44.5

5

o/ndepo

1wdepo

1mdepo

3m depo

12m bill

3ybond

5ybond

7ybond

10ybond

instrument

ann

ual

yie

ld (

%)

01.08.2012

03.09.2012

Bulgaria and euro area benchmark yield curves 03.09.2012

-1

0

1

2

3

4

5

6

o/ndepo

1wdepo

1mdepo

3m depo

12m bill

3ybond

5ybond

7ybond

10ybond

instrument

ann

ual

yie

ld (

%)

Bulgaria

euro area

Middle of

2

Sofibid and Sofibor

Yields on EUR-denominated govt securities in Bulgaria and on the euro area curve 03.09.2012

-1

0

1

2

3

4

5

6

7

3m d

epo

12m b

ill

2y b

ond

3y bon

d

4y b

ond

5y b

ond

6y bon

d

7y bon

d

8y bon

d

9y bon

d

10y bo

nd

15y bo

nd

instrument

ann

ual

yie

ld (

%)

BG domestic

BG global

euro area

SOFIBOR and 3M T-bill issuance, January - August 2012 (%)

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

03.0

113

.0123

.0102

.0212

.0222

.0203

.0313

.0323

.0302

.0412

.0422

.0402

.0512

.0522

.0501

.0611

.0621

.0601

.0711

.0721

.0731

.0710

.0820

.0830

.08

3M SOFIBID 3M SOFIBOR 3M T-bill LEONIA BIR

1. MONEY MARKET Plamen Petrunov

(+359 2) 9145 1610 In August the money market showed only a slight increase in

the depo deals volume and a decline in the volume of the

repo deals, compared to July. Interest rates remained at

record lows.

Vladimir Tsonchev (+359 2) 9145 1712

3

Interbank Money Market, volumes (BGN mln)

0

1000

2000

3000

4000

5000

6000

7000

June 2012 July 2012 August 2012

deposit deals repo deals

Interbank money market monthly volume increased

marginally in August - by only 1 per cent above July, to BGN

5785.1 million. The depo-deals volume increased by 4.8 per

cent, up to BGN 4717.8 million. In contrast, the repo-deals

traded volume declined by 13.1% down to BGN 1067.3

million.

The domestic

interbank market

maintained the

turnover reached in

July …

The total monthly volume of the Euromoney market term

transactions dropped by more than 24 per cent in August

compared to the previous month and reached BGN 6541.3

million. The total deposit deals volume (in all currencies -

EUR, USD and GBP) declined by 24.5 per cent to BGN 6479.9

million. This came as a result of the decline in the EUR

denominated trades, which was only partially compensated

by another increase in the USD trades. The drop in the euro

trade mainly reflects the record low interest rate levels in the

euro market. In contrast the USD trades still benefits from

relatively high yields. The repo deals volume, which had a

very small share in the market, partially recovered from the

July decline and increased by 22.7 per cent to BGN 61.4

million.

… for a month in a row

the USD deposits

increased

substantially, while

the EUR trades

declined markedly

4

Interbank Euromoney Market, volumes (BGN equivalent in mln)

0

1000

2000

3000

4000

5000

6000

7000

EUR EUR EUR USD USD USD Other Other Other

June 2012 July 2012 August2012

June 2012 July 2012 August2012

June 2012 July 2012 August2012

deposit deals repo deals

The banking system remained highly liquid and the average

daily excess reserves in August reached BGN 609.2 million,

following BGN 741.7 million in July (excess reserves are

calculated taking into account a calendar month, and not the

actual maintenance period – from the 4th of each month till

the 3rd of the next). There was not a single day in August

with “negative” excess reserves for the system.

The liquidity in the

banking system

remained high, with

excess reserves

recorded in each day

01.08

02.08

03.08

06.08

07.08

08.08

09.08

10.08

13.08

14.08

15.08

16.08

17.08

20.08

21.08

22.08

23.08

24.08

27.08

28.08

29.08

30.08

31.08

0

100

200

300

400

500

600

700

800

900

1,000

Interbank money market and excess reserves, August 2012 (BGN mln)

money market excess reserves

Liquidity in the banking system is influenced every month by

monetary flows through government securities (bills and

bonds of the Ministry of Finance), and in August there was a

net inflow to banks of BGN 267.7 million as a decrease in

5

resources. Pension transfers led to an increase in resources

by BGN 708.2 million.

Deposit Deals, August 2012 (BGN mln)

0

50

100

150

200

250

300

350

01.0

802

.08

03.0

806

.08

07.0

808

.08

09.0

810

.08

13.0

814

.08

15.0

816

.08

17.0

820

.08

21.0

822

.08

23.0

824

.08

27.0

828

.08

29.0

830

.08

31.0

8

all deposit deals unsecured of which overnight secured

1.1. Interbank market: deposit lending and repo-

transactions

Deposit lending maintained a prevailing share in the

interbank money market volume (deposit lending and repo-

deals). For August this share was 81.6 per cent of the

interbank transactions, following 78.6 per cent in July, due to

the serious rise in the depo-deals volume and the

simultaneous drop in the repo-deals. Deposit lending

remained banks’ main tool for managing current daily

liquidity.

Unsecured market

In August term unsecured deposit lending between market

participants amounted to BGN 4717.8 million, and 77.3 per

cent of this (BGN 3648.3 million) are overnight deals,

compared with an 80.5 per cent share (BGN 3624.6 million)

in July. In August there was once again a decrease of the

share of the overnight transactions at the expense of longer-

term deals - due mainly to quite low interest rates in the

shortest maturities and a search for higher yields.

6

Maturity breakdown of the unsecured interbank trades, 2012

20%

40%

60%

80%

0%

Jan Feb Mar Apr May Jun Jul Aug

100%

>3M

3M

1M

SW

ON

`

The maturity of the

interbank deals

gradually increased

during the last few

months…

One Week Effective Market Rates and Quotations

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

01.12 02.12 03.12 04.12 05.12 06.12 07.12 08.12

Unsecured Deposit Market, August 2012 (BGN mln)

0

50

100

150

200

250

300

350

01.08

02.08

03.08

06.08

07.08

08.08

09.08

10.08

13.08

14.08

15.08

16.08

17.08

20.08

21.08

22.08

23.08

24.08

27.08

28.08

29.08

30.08

31.08

overnight other

… The spot week

market (1W) rates

moved closely to the

bid rates on the back

of the increased

liquidity in this

segment, but also

the permanent

reserve surplus in

the system

Sofibid

Sofibor

Sofimid

Market Rate

7

Overnight Market Rates, August 2012

0.00

0.05

0.10

0.15

01.0

802

.08

03.0

806

.08

07.0

808

.08

09.0

810

.08

13.0

814

.08

15.0

816

.08

17.0

820

.08

21.0

822

.08

23.0

824

.08

27.0

828

.08

29.0

830

.08

31.0

8

Effective overnight rate - unsecured deposit deals SOFIBID ON SOFIBOR ON

The monthly average interest rate on the overnight

unsecured deposit lending continued declining and reached

0.04% following 0.09% in July.

The monthly average of the LEONIA, a reference rate based

on unsecured overnight deposit lending by 14 banks,

declined to 0.04% in August, following an average of 0.08%

in July. Hence the size of the BNB base interest rate for

September 2012 was set at 0.04%.

LEONIA maintained the level of 0.04% in the course of the

month, and kept the spread with the analogous index

reflecting the overnight levels of the euro area, EONIA,

negative.

LEONIA / EONIA

0.00

0.05

0.10

0.15

01.08

02.08

03.08

06.08

07.08

08.08

09.08

10.08

13.08

14.08

15.08

16.08

17.08

20.08

21.08

22.08

23.08

24.08

27.08

28.08

29.08

30.08

31.08

LEONIA EONIA

8

The money market yield curve at the end of August declined

further compared to July, notably along the longer

maturities.

4.50

Secured market

There were no secured deposit lending deals observed in

August, while the repo-deals’ share was 18.4 per cent of the

total interbank money market transactions volume (BGN

1167.3 million) while in July their share was 21.4 per cent

(BGN 1228.2 million).

MARKETS:

value in millions of BGN

equivalent in millions of EUR

value in millions of EUR

equivalent in millions of BGN

value in millions of USD

equivalent in millions of BGN

equivalent inmillions of EUR

equivalent in millions of BGN

equivalent in millions of EUR

TYPES OF DEALS:

unsecured deposit deals 4717.8 2412.2 572.3 1119.3 3329.8 5252.5 2685.6 48.6 24.8

secured deposit deals - - - - - - - - -

repo of Bulgarian govt securities* 1067.3 545.7 10.3 20.1 25.9 40.9 20.9 - -

outright purchases of short-term BGN Bulgarian govt securities - - - - - - - - -

outright purchases of long-term** BGN Bulgarian govt securities* 50.8 26.0 - - - - - -

outright purchases of long-term** forex Bulgarian govt securities* 21.6 11.0 33.6 65.7 - - - - -

* at market value; for repos - only the security purchase (money lending) leg

** bonds of over 1 year in original maturity

Source: BNB, from commercial banks' daily reports

BULGARIAN INTERBANK MONEY MONEY MARKET AND EUROMONEY MARKET DEALS BETWEEN BULGARIAN BANKS, AUGUST 2012 (in millions of the respective currencies)

interbank money market euromoney market deals between Bulgarian banks

deals in BGN deals in EUR deals in USD deals in other currencies

-

The money market yield curve

reflects theaverage value of

SOFIBIDand SOFIBOR

0.00

0.50

1.50

3.00

4.00

ON

SW 2W 3W 1M 2M 3M 4M 5M 6M 7M 8M 9M 10M

11M

12M

3.50

2.50

2.00

31.08.2012

31.07.20121.00

9

1.2. Outright interbank purchases of securities on the

secondary market

On the interbank secondary market for government

securities, the market value of outright purchases in August

reached BGN 72.4 million (compared to BGN 113.7 million in

July). All the deals were with longer than 12 months

securities, as there was no short-term (with initial maturity

less than one year) paper currently on the market.

Outright deals in Bulgarian government securities, August 2012 (BGN mln)

0

2

4

6

8

10

12

01.0

802

.08

03.0

806

.08

07.0

808

.08

09.0

810

.08

13.0

814

.08

15.0

816

.08

17.0

820

.08

21.0

822

.08

23.0

824

.08

27.0

828

.08

29.0

830

.08

31.0

8

BGN-denominated securities up to 12M BGN-denominated securities over 12M

forex-denominated securities

On the Euromarket in August the total volume of outright

purchases of government securities was BGN 65.7 million,

after BGN 37.0 million in July.

10

2. CAPITAL MARKET Boris Malinchev

(+359 2) 9145 1704

The following primary auction of government securities was

carried out by the Bulgarian National Bank as an agent of the

Ministry of Finance in August:

- on 13 August for a batch of an issue BG2040012218

(10Y6M government securities) with maturity date 11

July 2022, at the amount of BGN 50 million and interest

rate 5.00%; for participation in the auction were

admitted orders at the amount of BGN 273 650 000;

the Ministry of Finance approved bids at the amount of

BGN 50 million;

In August the Bulgarian Stock Exchange – Sofia AD (BSE-

Sofia) registered for trading on the bonds segment the

following corporate bond issue:

- 8Y bonds for EUR 6 million, issued by Azalia I EAD -

Varna, interest 8.00%, issue date 15.12.2011, 6-

month interest payment, (stock-exchange code

1AZA).

The monthly secondary market stock-exchange turnover of

corporate bonds decreased by nearly 48% in August,

amounting to BGN 5.8 million (a daily average of BGN 0.25

million) after BGN 9.3 million in July. Out of stock exchange

were concluded deals at the amount of BGN 4.4 million.

BSE transactions with bonds, August 2012 (date T; BGN mln)

0

5

10

15

20

01.0

803

.08

07.0

809

.08

13.0

815

.08

17.0

821

.08

23.0

827

.08

29.0

831

.08

Bonds Segment Bonds / OTC

11

The prices of EUR-denominated 2013 globals went under the

103% level, the prices of the new 2017 globals went up to

the 106% level. The USD-denominated 2015 globals price

rose above the 114% mark.

On the secondary market the price of the compensation

instruments showed substantial fluctuations during the

month starting from the BGN 0.75 per item at the beginning

of the month and reaching BGN 0.82 per item at the middle

of the month and went down to BGN 0.75 at the month’s

end. The compensation instruments segment monthly

turnover made a more than two times increase, amounting

to BGN 10.9 million (a daily average of BGN 0.47 million)

compared with the BGN 4.0 million in July.

BSE transactions with compensatories, August 2012 (date T; BGN thousand)

0200400600800

100012001400160018002000

01.0

802

.0803

.0806

.0807

.0808

.0809

.0810

.0813

.0814

.0815

.0816

.0817

.0820

.0821

.0822

.0823

.0824

.0827

.0828

.0829

.0830

.0831

.08

Compens.instruments Segment compens.instruments / OTC privatis.segment (comp)

12

ASSET MARKETS

GROSS ASSETS:

real estate

(National Statistical Institute – quarterly

data)

NET ASSETS:

equity

commodities

forex

BG40 и SOFIX

75

85

95

105

115

125

135

145

03.0

1

13.0

1

23.0

1

02.0

2

12.0

2

22.0

2

03.0

3

13.0

3

23.0

3

02.0

4

12.0

4

22.0

4

02.0

5

12.0

5

22.0

5

01.0

6

11.0

6

21.0

6

01.0

7

11.0

7

21.0

7

31.0

7

10.0

8

20.0

8

30.0

8

250

300

350

400

450

500

BG40 SOFIX (дясна скала)

Re a l Es ta te P r ic e s (BGN pe r s q. m .)

0

0

0

830

0

850

860

870

880

890

03 .01 23.01 12 .02 03 .03 23 .03 12 .04 02 .05 22 .05 11 .06 01 .07 21 .07 10 .08 30 .08

84

81

82

80

Gold (XAU/BGN)

1400

1600

1800

2000

2200

2400

2600

2800

03.0

113

.0123

.0102

.0212

.0222

.0203

.0313

.0323

.0302

.0412

.0422

.0402

.0512

.0522

.0501

.0611

.0621

.0601

.0711

.0721

.0731

.0710

.0820

.0830

.08

FOREX (USD/BGN)

1.20

1.25

1.30

1.35

1.40

1.45

1.50

1.55

1.60

1.65

1.70

03.0

113

.0123

.0102

.0212

.0222

.0203

.0313

.0323

.0302

.0412

.0422

.0402

.0512

.0522

.0501

.0611

.0621

.0601

.0711

.0721

.0731

.0710

.0820

.0830

.08

13

Boris Malinchev EQUITY CAPITAL (NET ASSETS) (+359 2) 9145 1704

TRADE IN SECURITIES REGISTERED ON THE BSE-SOFIA : STOCK-EXCHANGE AND OTC TURNOVER (in millions of BGN) August 2012

municipal bonds

corporate bonds

of public companies

of non-public

companies

BSE trading

of which: 4.6 16.7 8.6 0 5.8 0.0 10.9 0.0 0.0 0.7 0.4 0 0

regular deals 4.6 16.7 8.6 0 5.8 0.0 10.9 0.0 0.0 0.7 0.4 - -

privatis. segment deals (cash) 0 0 - - - - - - - 0 0

Privatis. Segm. (compensative)* 0 0 - - - - - - - 0 - 0 0

Initial Public Offering Segment* 0 0 - 0 0 - - 0 - 0 - - -

OTC trading (purchases and sales, repo, tender purchases, redemption, registration etc.)** 3.1 105.9 0.5 0 4.4 0 0.0 0 0 10.0 2.6 - -

Source: BSE-Sofia daily reports

* Not included in the above totals

** reported through BSE trading platform

Trade in equities not registered on the BSE-

SofiaUCIT's

SegmentCompensation Instruments

Segment

MARKETS ALTERNATIVE MARKET Bonds Segment

MAIN MARKETPremium Equities Segment

Standard Equities Segment

Special Purpose Vehicles Segment

Structured Products Segment

Subscription Rights

Segment

Equities Segment

Special Purpose Vehicles Segment

The Bulgarian Stock Exchange – Sofia (BSE-Sofia) monthly

turnover in August decreases by more than 30%, amounting

to BGN 31.0 million (a daily average of BGN 1.3 million),

compared to BGN 44.7 million in July. More significant

turnover reaches the trade in shares of Blagoevgrad-BT AD

(BGN 6 million). The turnover in deals concluded off-stock-

exchange (reported through the stock-exchange platform) is

BGN 122.1 million. More significant deals has the trade in

shares of Cereals AD (BGN 96 million) and CCB Real Estate

Fund SIPC.

BSE transactions with shares, August 2012 (date T; BGN mln)

0

510

15

20

2530

35

40

01.0

802

.0803

.0806

.0807

.0808

.0809

.0810

.0813

.0814

.0815

.0816

.0817

.0820

.0821

.0822

.0823

.0824

.0827

.0828

.0829

.0830

.0831

.08

AltM/SPV/OTC

AltM/SPV

AltM /Equities/OTC

AltM/Equities

priv atis.(BGN)

SPV/OTC

SPV

Standard/OTC

Standard Equities

Premium/OTC

Premium Equities

14

The prices of the Bulgarian stock market during the month of

August again show a little fluctuating trend similar to that of

the prices of the leading world and regional stock markets.

DAX, SOFIX and BET, August 2012

4000

4500

5000

5500

6000

6500

7000

7500

8000

01.0

802

.0803

.0806

.0807

.0808

.0809

.0810

.0813

.0814

.0815

.0816

.0817

.0820

.0821

.0822

.0823

.0824

.0827

.0828

.0829

.0830

.0831

.08

250

300

350

400

450

500

DAX BET SOFIX (right scale)

BGTR30, BGREIT and CGIX in August 2012 г.

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

8.1 8.8 8.15 8.22 8.29

BGREIT

CGIX

BGTR30

15

Pension fund price indices, August 2012 (1 July 2004 BGN 1)

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1.45

1.50

01.0

802

.0803

.0804

.0805

.0806

.0807

.0808

.0809

.0810

.0811

.0812

.0813

.0814

.0815

.0816

.0817

.0818

.0819

.0820

.0821

.0822

.0823

.0824

.0825

.0826

.0827

.0828

.0829

.0830

.0831

.08

VOLIDEX PROFIDEX UNIDEX

Prices of the bank shares in Bulgaria, eurozone and emerging markets, January - August 2012

20253035404550556065707580859095

100

03.0

110

.01

17.0

124

.0131

.01

07.0

214

.02

21.0

228

.02

06.0

313

.03

20.0

327

.0303

.04

12.0

423

.04

02.0

509

.05

16.0

523

.05

01.0

608

.06

15.0

622

.06

29.0

606

.07

13.0

720

.07

27.0

703

.0810

.08

17.0

824

.08

31.0

8

125.000145.000165.000185.000205.000225.000245.000265.000285.000305.000325.000345.000365.000385.000405.000425.000445.000465.000485.000505.000525.000545.000

BANKSBSE

BANKSEMU

BANKSEM

BG 40 a n d th e e q u itie s p rice s o f Bu lg a ria n b a n ks, l iste d on th e BS E - S o fia , Au g u st 2012

100.00

105.00

110.00

115.00

120.00

125.00

130.00

135.00

140.00

01.08 07.08 13.08 17.08 23.08 29.08

50.00

60.00

70.00

80.00

90.00

100.00

B G 40

B A N K SB S E(righ ts c a le )

16

The prices of the banks listed on the BSE-Sofia followed in

general the movement of the leading stock indices, the

SOFIX and the BG-40, and showed a positive trend similar in

general to the trend of the eurozone banks index.

There were no placements of shares or bonds on the IPO

segment of the BSE-Sofia in August.

BSE - Initial Public Offering Segment, August 2012 (date T; BGN thousand)

0

200

400

600

800

1000

01.0

802

.0803

.0806

.0807

.0808

.0809

.0810

.0813

.0814

.0815

.0816

.0817

.0820

.0821

.0822

.0823

.0824

.0827

.0828

.0829

.0830

.0831

.08

shares rights/shares bonds

Lubomir Tonev 3. FOREIGN EXCHANGE MARKET

(+359 2) 9145 1608 At the beginning of the month, the euro rose slightly against

the dollar after the ECB as expected left unchanged its main

interest rate at the level of 0.75%. The single currency rose

to a one month maximum, due to the optimism of the

markets, that the ECB will take more decisive measures to

tackle the debt crisis and prevent the growth of yield of

Spanish and Italian debt. Subsequently, the dollar and the

yen rose, attracting market participants as safe heaven, after

enthusiasm about the ECB announced intentions, gradually

gave way to concerns, because of which the yields of debt

securities of Spain and Italy went up. The single currency lost

ground after the publication of data, showing that the

Spanish economy "stuck" in an even deeper recession, and

the important region of Spain - Catalonia announced an

economical need of huge bailout from Madrid. At the end of

August the euro stabilised against the dollar and traded at a

Pavlina Babunova (+359 2) 9145 1907

17

7-month high, supported by speculations that Fed’s

Chairman Bernanke, will signal for a new round of

“quantitative easing”. The markets put their hope, that the

ECB will unveil measures for fighting the debt crisis at the

beginning of September. Increasing these expectations,

ECB’s President Mario Draghi expressed the opinion that the

central bank should introduce extraordinary measures to fulfil

its mandate of maintaining price stability.

In the first days of August the USD exchange rate continued

to rise against the BGN and on 8 August reached the month’s

maximum of BGN 1.59725. The U.S. currency rate stabilised

slightly below the maximum by the end of the second ten

days, and gradually started to fall against the BGN reaching a

lowest value of BGN 1.55089 on 31 August. The average

monthly exchange rate of the USD against the BGN in August

was BGN 1.57742, about BGN 0.014 lower than the average

monthly exchange rate for the previous month.

Daily BNB reference exchange rate for the USD,August 2012 (BGN per USD 1)

1.45

1.47

1.49

1.51

1.53

1.55

1.57

1.59

1.61

1.63

1.65

01.0

802

.0803

.0806

.0807

.0808

.0809

.0810

.0813

.0814

.0815

.0816

.0817

.0820

.0821

.0822

.0823

.0824

.0827

.0828

.0829

.0830

.0831

.08

18

Daily USD turnover and exchange rates of banks, August 2012 SPOT

0

5

10

15

20

25

30

01.0

802

.0803

.08

06.0

807

.0808

.0809

.0810

.08

13.0

814

.08

15.0

816

.0817

.08

20.0

821

.08

22.0

823

.08

24.0

827

.0828

.08

29.0

830

.08

31.0

8

BG

N p

er U

SD

1U

SD

mln

1.45

1.47

1.49

1.51

1.53

1.55

1.57

1.59

1.61

1.63

1.65

traded between banks bought from customerssold to customers average rate for purchases from customersaverage rate for sales to customers average interbank rate

The total turnover on the local foreign-exchange market (a

gross sum of all sales and purchases by reporting entities in

August was EUR 60416.2 million, and for a consecutive

month increased compared to the previous months. The

increase was minimal compared with July, only by about EUR

505.8 million. The average daily turnover was EUR 2626.8

million, and slightly decreased, compared to the previous

month. The increase in turnover was realised in the most

important segment of the forex market – spot trade between

the BNB and the commercial banks. The turnover in the other

two segments - the spot trade between commercial banks

and their customers and the net interbank spot trade,

decreased in August, although slightly, compared to the

previous month.

The trade between the BNB and the commercial banks in

August was EUR 27911.7 million. There is an increase by

about EUR 393.6 million compared to the previous month.

The BNB is a net buyer of foreign exchange with a minimum

positive balance of EUR 83.7million. In deals with budgetary

organisations, the BNB is a net buyer of foreign exchange

with a positive balance of EUR 70.9 million.

19

Foreign exchange trading between banks, August 2011 to August 2012 (in mln of EUR) SPOT

134.0

179.0

78.8

175.9

167.3

113.7

152.0

110.7

177.0

234.2

233.8

151.7

113.6

August-11

September-11

October-11

November-11

December-11

January-12

February-12

March-12

April-12

May-12

June-12

July-12

August-12

Monthly EUR trading between BNB and banks,August 2012 to August 2012(EUR mln)SPOT

9754

7828

9557

10099

9651

10663

11753

12044

9323

12299

12894

13838

-9562

-7700

-9604

-10111

-9784

-11071

-11967

-12112

-9177

-12320

-12847

-13680

-13914

192

-47

-12

-133

-408

-214

-68

-21

13998

47

158

84

146

128

August-11

September-11

Octobe

r-11

November-1

1

December-1

1Ja

nuary-

12

Febru

ary-12

March-1

2April-12May-12Ju

ne-12Ju

ly-12

August-12

bought from banks sold to banks net

.

20

EUR exchange rate, August 2012 (BGN per EUR 1)

1.91182

1.95583

1.99984

01.0

802

.0803

.0804

.0805

.0806

.0807

.0808

.0809

.0810

.0811

.0812

.0813

.0814

.0815

.0816

.0817

.0818

.0819

.0820

.0821

.0822

.0823

.0824

.0825

.0826

.0827

.0828

.0829

.0830

.0831

.08

BNB interbank banks from customers banks to customers

Daily EUR turnover of banks, August 2012 (EUR mln) SPOT

0

20

40

60

80

100

120

140

160

180

01.0

802

.0803

.0804

.0805

.0806

.0807

.0808

.0809

.0810

.0811

.0812

.0813

.0814

.0815

.0816

.0817

.0818

.0819

.0820

.0821

.0822

.0823

.0824

.0825

.0826

.0827

.0828

.0829

.0830

.0831

.08

traded between banks bought from customers sold to customers

The Interbank spot trading without the participation of the

BNB in August decreased, compared to the previous month

and reached EUR 113.6 million.

The turnover between commercial banks and their final

customers in August was EUR 4257.2 million. In comparison

21

with July the trade decreased by about EUR 149.9 million. On

the customers market there is almost complete parity, the

sales exceed purchases by only EUR 2.4 million.

Foreign exchange trading of banks with customers - total, August 2012 (in mln of EUR) SPOT

-200

-150

-100

-50

0

50

100

150

200

01.0

802

.08

03.0

806

.08

07.0

808

.08

09.0

810

.08

13.0

814

.08

15.0

816

.08

17.0

820

.08

21.0

822

.0823

.08

24.0

827

.08

28.0

829

.08

30.0

831

.08

bought from customers sold to customers net

Foreign exchange trading of banks with nonresidents, August 2012 (in mln of EUR) SPOT

-200

-150

-100

-50

0

50

100

150

200

01.0

802

.08

03.0

806

.08

07.0

808

.08

09.0

810

.08

13.0

814

.08

15.0

816

.0817

.08

20.0

821

.08

22.0

823

.08

24.0

827

.08

28.0

829

.08

30.0

831

.08

bought from nonresidents sold to nonresidents net

22

Financial institutions registered in the Central Bank under

Art. 3, Para 2 of the Law on Credit Institutions and reporting

daily to the BNB foreign currency trading against BGN in the

country decreased their turnover in August compared to the

previous month. They buy foreign currency at the amount of

EUR 135.3 million and sell foreign currency equal to EUR

122.6 million.

Foreign exchange market August 2012 SPOT(in mln of EUR)

Purchases Sales BalanceInterbank market (commercial banks) 113.6 113.6 0.0(Commercial) banks with customers 2127.4 2129.8 -2.4 - of which: with nonresidents 74.6 148.0 -73.4

BNB total 14087.2 13932.9 154.3 BNB with banks 13997.7 13914.0 83.7 of which: *with banks - SPOT 9455.5 4739.0 4716.5 *with banks - TOM 132.0 0.0 132.0 *with banks - TODAY 4410.2 9175.0 -4764.8 *with banks - NOTES 0.0 0.0 0.0 BNB transactions with budgetary organisations 89.5 18.6 70.9 BNB notes operations at counters 0.0 0.3 -0.3

Source: BNB, from banks’ and BNB’s daily reports

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3

1-interbank (without BNB); 2-banks with customers; 3-forex trading of financial institutions

Currency structure of forex trading for some participants, August 2012

Others

USD

EUR

23

Forex swaps and forwards in EUR terms (estimate)

FX swap and forward transactions - banks with final customers (in mln of EUR)Purchases Sales Balance

August 2012 1968.3 2030.2 -61.9 - of which: with nonresidents 1892.5 1958.3 -65.8FX structure (percentage)EUR 90.5 90.6Others 9.5 9.4

Interbank FX swap and forward transactions banks (in mln of EUR)Purchases Sales Balance

August 2012 56.0 56.0 0.0FX structure (percentage)EUR 100.0 100.0

The figures for foreign exchange swap deals include both the sales of foreign currecies for BGN and the subsequent purchase operations.

Source: BNB, from banks’ daily reports

TENDENCIES

Short-term expectations:

– the interbank money market to maintain the exceptionally

low interest rate levels and relatively low turnover;

– the SOFIX to move within the interval of 310 - 320 points;

– USD/BGN to move within 1.55 – 1.48 in September.

24