> The domestic money market slightly decreased in both

activity and volumes in April; the interest rates

increased, excluding the average interest rate of the

unsecured overnight deposit deals, which kept the level

from the preceding month.

> Two-months high of the euro against the dollar in April.

> A decrease in the monthly turnover of the Bulgarian

Stock Exchange and in the SOFIX index in April.

APRIL 2015 No 5 / 2015

2

DEBT MARKET

Middle of Sofibid and Sofibor

3

1. MONEY MARKET

In April the interbank money market volume was

with a slight decrease compared to March, which

is illustrated by the lower volumes of deposit

deals. The average daily volume of the interbank

money market increased.

The trade remained focused mainly in the

overnight maturity; the interest rate throughout

the month remained stable, without any changes.

Georgy Tsvetkov

(+359 2) 9145 1611

4

Interbank Money Market, volumes (BGN mln)

0

1000

2000

3000

4000

5000

6000

November

2014

December

2014

January

2015

February

2015

March 2015 April 2015

deposit deals repo deals

The overall volume of the domestic money market

increased by 4.05 per cent to BGN 1497.2 million.

The deposit lending deals volume went down by

16.08 per cent to BGN 873.9 million, while the

repo-deals volume increased by 56.74 per cent, to

BGN 623.3 million.

The monthly volume of the euromoney market

term transactions decreased by 4.42 per cent and

reached BGN 6000.7 million. The deposit lending

deals (in all currencies: EUR, USD, CHF and GBP)

are with a decrease of 4.59 per cent, to BGN

5985.1 million, illustrated mainly by a decrease in

the euro-denominated and the U.S. dollar-

denominated deals. The repo-deals registered in

April reached BGN 15.6 million.

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

February

2015

March 2015 April 2015 February

2015

March 2015 April 2015 February

2015

March 2015 April 2015

deposit deals repo deals

Decrease in volumes of the

deposit deals and a

substantial increase in

volumes of the repo-deals…

… in combination with a

decrease in the euromoney

market volumes.

5

The banking system remained highly liquid. The

average daily excess reserves in April slightly

decreased (by 4.99 per cent) and reached BGN

5098.0 million, following BGN 5365.6 million in

March (excess reserves are calculated taking into

account a calendar month, and not the actual

maintenance period – from the 4th working day of

each month till the 3rd working day of the next).

There was not a single day during the month with

“negative” excess reserves for the system.

Interbank money market and excess reserves,

April 2015 (BGN mln)

0

1 000

2 000

3 000

4 000

5 000

6 000

01.04

02.04

03.04

06.04

07.04

08.04

09.04

14.04

15.04

16.04

17.04

20.04

21.04

22.04

23.04

24.04

27.04

28.04

29.04

30.04

excess reserves money market

Liquidity in the banking system is also influenced

every month by: (1) monetary flows through

government securities - bills and bonds of the

Ministry of Finance, which in April resulted in a

net outflow from banks of BGN 44.1 million; and

(2) pension transfers, which in April led to an

increase in system resources by BGN 871.0

million.

The liquidity in the

banking system

remained significant.

6

Deposit Deals, April 2015 (BGN mln)

0

10

20

30

40

50

60

70

80

01.0

4

02.0

4

03.0

4

06.0

4

07.0

4

08.0

4

09.0

4

14.0

4

15.0

4

16.0

4

17.0

4

20.0

4

21.0

4

22.0

4

23.0

4

24.0

4

27.0

4

28.0

4

29.0

4

30.0

4

all deposit deals unsecured of which overnight secured

1.1. Interbank market: deposit lending and

repo- transactions

Deposit lending deals have a prevailing share in

the interbank money market volume (deposit

lending and repo-deals); for April this share

decreased and reached 58.4 per cent, after 72.4

per cent in March; the repo-deals comprised 41.6

per cent compared to 27.6 per cent in March.

Unsecured market

In April term unsecured deposit lending between

market participants amounted to BGN 873.9

million and 89.1 per cent of these (BGN 778.9

million) were overnight deals. This share

decreased compared to March, when 99.4 per

cent (BGN 1035.5 million) of the deals were

overnight.

7

Maturity breakdown of the unsecured interbank trades

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Apr'14 Jun'14 Aug'14 Oct'14 Dec'14 Feb'15 Apr'15

ON up to 1W above 1W up to 1M above 1M up to 3M above 3M

`

Unsecured Deposit Market, April 2015 (BGN mln)

0

10

20

30

40

50

60

70

80

01.04

02.04

03.04

06.04

07.04

08.04

09.04

14.04

15.04

16.04

17.04

20.04

21.04

22.04

23.04

24.04

27.04

28.04

29.04

30.04

overnight other

Overnight Market Rates, April 2015

0.00

0.01

0.02

0.03

0.04

0.05

0.06

0.07

01.0

4

02.0

4

03.0

4

06.0

4

07.0

4

08.0

4

09.0

4

14.0

4

15.0

4

16.0

4

17.0

4

20.0

4

21.0

4

22.0

4

23.0

4

24.0

4

27.0

4

28.0

4

29.0

4

30.0

4

Effective overnight rate - unsecured deposit deals SOFIBID ON SOFIBOR ON

8

The monthly average interest rate of the

overnight unsecured deposit lending in April

remained unchanged, at the level of 0.01%.

The monthly average of the LEONIA, a reference

rate based on the unsecured overnight deposit

lending by a panel of banks also remained

unchanged and amounted to 0.01%. Hence the

size of the BNB base interest rate for May 2015

was again set at 0.01%.

LEONIA / EONIA, April 2015

-0.10

-0.08

-0.06

-0.04

-0.02

0.00

0.02

01.0

4

02.0

4

03.0

4

06.0

4

07.0

4

08.0

4

09.0

4

14.0

4

15.0

4

16.0

4

17.0

4

20.0

4

21.0

4

22.0

4

23.0

4

24.0

4

27.0

4

28.0

4

29.0

4

30.0

4

LEONIA EONIA

The money market yield curve decreased more

visibly throughout maturities longer than 7

months.

The money market

yield curve

reflects the

average value of

SOFIBID

and SOFIBOR

0.000

0.200

0.400

0.600

0.800

1.000

1.200

1.400

ON

2W 1M 3M 5M 7M 9M 11M

30.04.2015

31.03.2015

9

Secured market

There were no secured deposit lending deals in

April, while the repo-deals share was 41.6 per

cent of the total interbank money market

transactions volume (BGN 623.3 million); this

share substantially increased compared to March,

when it amounted to 27.6 per cent (BGN 397.6

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 in

millions of

EUR

equivalent in

millions of

BGN

equivalent in

millions of

EUR

TYPES OF DEALS:

unsecured deposit deals 873.9 446.8 68.4 133.8 3229.0 5845.7 2988.9 5.7 2.9

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

repo of Bulgarian govt securities* 623.3 318.7 8.0 15.6 - - - - -

outright purchases of short-term BGN Bulgarian govt securities 16.1 8.2 - - - - - - -

outright purchases of short-term forex Bulgarian govt securities - - 48.4 94.7 - - - - -

outright purchases of long-term** BGN Bulgarian govt securities* 71.9 36.8 - - - - - - -

outright purchases of long-term** forex Bulgarian govt securities* - - 37.9 74.1 - - - - -

* 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, APRIL 2015 (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

1.2. Outright interbank purchases of

securities on the secondary market

On the interbank secondary market for

government securities, the market value of the

outright purchases of all maturities in April

reached BGN 88.0 million (decrease of 53.47%

compared to BGN 189.1 million in March).

10

Outright deals in Bulgarian government securities,

April 2015 (BGN mln)

0

2

4

6

8

10

12

14

16

18

01.0

4

02.0

4

03.0

4

06.0

4

07.0

4

08.0

4

09.0

4

14.0

4

15.0

4

16.0

4

17.0

4

20.0

4

21.0

4

22.0

4

23.0

4

24.0

4

27.0

4

28.0

4

29.0

4

30.0

4

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

On the euromoney market in April the volume of

outright purchases of government securities

decreased substantially by 29.38% and reached

BGN 168.8 million, after BGN 238.9 million in

March.

11

2. CAPITAL MARKET

The following primary auctions of government

securities were carried out by the Bulgarian

National Bank as an agent of the Ministry of

Finance in April:

-On 20th of April for a batch of an issue

№BG2040115219/22.04.2015 (10Y government

securities) with maturity date 22.04.2025, at BGN

50 million and interest rate 2.30%; for

participation in the auction were admitted orders

at BGN 122.1 million; the Ministry of Finance

approved bids for BGN 50 million.

The monthly turnover of corporate bonds listed on

the stock exchange continued its severe decline

during the month, and comprised BGN 16,5

million (BGN 0,9 thousand daily average), while it

was BGN 0,1 million in March. This was due to

single high volume deals, which accumulated up

to BGN 16 million on the 07.04.2015.

Ivo Grigorov

(+359 2) 9145 1624

12

On the secondary market the prices of the

compensatory instruments registered slight

changes. The monthly stock-exchange turnover of

compensatory instruments increased and

accumulated approximately to BGN 2,0 million

(BGN 0,11 million daily average) while for March

it consisted only of BGN 1,6 million.

13

ASSET MARKETS

GROSS ASSETS:

real estate

(National Statistical

Institute – quarterly data)

NET ASSETS:

equity

commodities

forex

14

EQUITY CAPITAL (NET ASSETS)

The monthly registered turnover of shares on the

stock-exchange market for April continued to

decline, and accumulated to BGN 8.0 million

(daily average of 0,05 million), while in March it

was 18.1 million, which is a decline of 55.74%. A

substantial shares turnover was registered by CB

Central Cooperative Bank AD-Sofia, Chimimport

AD-Sofia, Advance Terrafund REIT-Sofia and

Enemona AD-Kozloduy.

DEALING IN SECURITIES REGISTERED ON THE BSE-SOFIA: STOCK-EXCHANGE AND OTC TURNOVER (in millions of BGN) APRIL 2015

MARKETS

MAIN MARKET

ALTERNATIVE MARKET

Trade in equities not registered on the

BSE-Sofia

Premium

Equities Segmen

t

Standard

Equities

Segment

Special Purpose Vehicles Segment

Bonds Segment

Compensation

Instruments Segment

Exchange Traded

Products Segment***

Subscription

Rights Segment

Equities

Segment

Special Purpose Vehicles Segment

municipal bonds

corporate bonds

UCIT

Structural

products

of public companies

of non-public companies

BSE deals 1.7 6.3 2.3 0 16.5 1.9 0 0 0.1 0.4 1.0 0 0 of which:

regular deals 1.7 6.3 2.3 0 16.5 1.9 0 0 0.1 0.4 1.0 - - 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 deals (purchases and sales, repo, tender purchases, redemption, registration etc.)** 0.7 21.6 0.6 0 0 0 0 0 0 1.8 8.8 - -

Source: BSE-Sofia daily reports

* Not included in the above totals

** reported through BSE trading platform

*** The Exchange Traded Products Segment was created in May 2014; it replaced the former UCIT's Segment and Structured Products Segment

Ivo Grigorov

(+359 2) 9145 1624

15

The value of the off stock-exchange deals

reported using the stock-exchange platform

during March, added up to BGN 22,3 million. Of

which a more substantial amount was registered by

the shares of Chimsnab Bulgaria AD, Velgraph

Asset Management AD-Sofia, Synthetica AD-Sofia

and Delta Credit REIT.

The main equity prices index of the Bulgarian stock

market SOFIX showed in April a negative trend

(2.22% decrease). For the same period the leading

European economy index (Germany) DAX

decreased with 4.2%, whereas the Romanian BET

showed a positive movement (6.68 % increase).

16

17

The index of the equity prices of the banks listed

on the BSE-Sofia showed stable movement during

the month similar in general to the movement of

the еurozone banks’ index.

There were no issues placed on the Initial Public

Offering segment of the BSE-Sofia in February.

3. FOREIGN EXCHANGE MARKET

The euro rose against the dollar in April, reaching

a two-months peak, due to the ever increasing

expectations that Greece and its creditors will

reach an agreement on economic reforms that

Athens must take to receive additional financial

assistance. The decline of the dollar was

influenced by unfavorable economic news from

the labour and housing markets of the US, which

were weaker than expected. The growth of the

single european currency was also supported by

final data on inflation in the eurozone in March,

where consumer prices rose by 0.1% on a

monthly basis and also by the positive news of

rapid economic growth in Spain in the first quarter

of 2015

In early April, the USD-BGN remained relatively

constant, due to the reduced market activity in

connection with the Easter holidays in the Catholic

community. At the end of the first ten days,

followed a sharp rise in the dollar against the lev,

as on 14 April was registered a maximum value of

the dollar against the lev-BGN 1.85141 . By the

end of the month gradually was formed an

upward trend of the lev against the dollar in the

last working day in April the dollar registered a

Lubomir Tonev

(+359 2) 9145 1608

Pavlina Babunova (+359 2) 9145 1907

18

minimum value of BGN 1.74394. The official

average rate of the dollar against the lev for the

month was 1.81020, remained almost at the level

of the average rate from the previous month.

19

20

For a month in a row the total turnover of the

forex market (gross sum of all purchases and

sales by reporting entities) increased and reached

in April EUR48 009,7 million. The increase of the

total turnover, compared to the previous month,

was EUR 7 632,6 million. The average daily

turnover for the month was EUR 2 400,5 million,

and also increased compared to March. The

increase in total turnover was realised in the three

main segments of the trade- trade between banks

and BNB, the trade between banks and their

customers and interbank trading (without the

participation of BNB).

21

The interbank spot trading between BNB and the

banks reached in April EUR 21 287,3 million. The

increase in comparison with the previous month

was EUR 3 813,4 million. Тhe central bank was a

net seller of foreign currency to the banks with a

negative balance of EUR 126,7 million for the

month. As a servicing bank of the state budget,

BNB was a net buyer of foreign exchange from

budget organisations in non-cash payments in

April with a balance of EUR 478,1 million. At the

counter transactions with citizens and budgetary

organisations, BNB was a net seller of foreign

currency for that month, with negative balance of

EUR 2,4 million.

22

The turnover in the interbank trade, without the

participation of BNB, reached in April EUR 312,0

million. The increase, compared to the previous

month was EUR 28.0 million.

The trade between banks and their customers in

April increased and reached EUR 4 300,1million.

By comparison with March the increase was EUR

319,1 million and the sales of the banks to their

customers exceeded the purchases from them

with EUR 406,5 million.

23

24

Foreign exchange market April 2015 SPOT (in mln of EUR)

Purchases Sales Balance

Interbank market (commercial banks) 312.0 312.0 0

(Commercial) banks with customers 1946.8 2353.3 -406.5

- of which: with nonresidents 73.5 333.5 -260.0

BNB total 11073.6 10724.7 348.9

BNB with banks 10580.3 10707.0 -126.7

of which: *with banks - SPOT 1184.0 9602.0 -8418.0

*with banks - TOM 10.0 0 10.0

*with banks - TODAY 9386.3 1105.0 8281.3

*with banks - NOTES 0 0 0

BNB transactions with budget organisations on account 493.4 15.3 478.1

BNB notes operations at counters 0.0 2.4 -2.4

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

25

TENDENCES

Short-term expectations:

– the interbank money market to keep its overall activity and record low interest

rates.

– USD/BGN to move within BGN 1,78 - 1,82.

– a decline of SOFIX due to the uncertainty in the European

market, movement within the range of 490 – 510 points.

Forex swaps and forwards in EUR terms (estimate)

FX swap and forward transactions - banks with final customers (in mln of

EUR)

Purchases Sales Balance

April 2015 2445.9 2485.4 -39.5

- of which: with nonresidents 2375.1 2368.7 6.5

FX structure (percentage)

EUR 95.6 95.4

Others * 4.4 4.6

* prevail USD

Interbank FX swap and forward transactions (in mln of

EUR)

Purchases Sales Balance

April 2015 40.0 40.0 0.0

FX 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