1

9 December 2013


Foreign exchange and derivatives market turnover in Bulgaria


Every three years, the Bank for International Settlements (BIS), Basel, Switzerland, coordinates an
international survey on developments in the foreign exchange and OTC derivatives markets. The objective of
the reporting exercise is to obtain comprehensive and internationally consistent information on the size and
the structure of the above markets. This contributes to the increase of market transparency and facilitates
discussions on reforms in OTC markets. BIS determines the coverage of the data and the methodology for
their collection. At national level, the survey is carried out by the central banks/ monetary authorities in the
participating countries.
In 2013, the Bulgarian National Bank (BNB) took part for the third time, as one of a total of 53 central
banks, in the Triennial Central Banks survey of foreign exchange and OTC derivatives market activity. The
Analyses Division of the BNB Treasury Directorate coordinated the survey on the Bulgarian financial
market. On the basis of a preliminary review, the BNB selected twelve commercial banks
1
to participate in
the survey. All reporting institutions submitted data on the turnover for April 2013 (turnover part) and only
one reported data on the amounts outstanding at end- June 2013 (outstanding part).
We, hereby, present the survey results for Bulgaria, summarizing data for the foreign exchange and
OTC interest rate derivatives turnover in April 2013 and presenting breakdowns by instrument, counterparty,
currency pair and maturity.


1
BNP PARIBAS S.A. SOFIA BRANCH, CIBANK JSC, CITIBANK BULGARIA NA SOFIA BRANCH, DSK
BANK, EUROBANK EFG BULGARIA, FIRST INVESTMENT BANK, PIRAEUS BANK BULGARIA,
RAIFFEISENBANK (BULGARIA), SOCIETE GENERALE EXPRESSBANK, UNICREDIT BULBANK,
UNITED BULGARIAN BANK, ING BANK NV SOFIA BRANCH.

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1. Foreign exchange turnover
The average daily turnover in the foreign exchange market (spot transactions, outright forwards,
foreign exchange swaps, currency swaps and OTC options) in April 2013 amounted to 1 624.7 million US
dollars (Table 1). It went up by 86 percent between the 2013 and 2010 surveys and followed an increase of
55 percent between the 2010 and 2007 surveys.
364
16
178
4 1
604
55
211
4
1 217
38
367
4
0
200
400
600
800
1 000
1 200
1 400
Spot
transactions
Outright
forwards
Foreign
exchange
swaps
Currency
swaps
Options and
other
products
Foreign exchange market turnover by instrument
Daily averages in April, in millions of US dollars
2007 2010 2013

Spot transactions accounted for the greatest share in the foreign exchange market, representing 75
percent of the total in April 2013 (69 percent in April 2010). The average daily turnover in the spot market in
April 2013 amounted to 1 216.6 million US dollars, which represents an increase of 102 percent from April
2010 and contributes 82 percent to the rise in the foreign exchange market activity in April 2013. While the
increase in value terms exceeded significantly the upward move, recorded in April 2007 (an increase by
66%), its contribution to the rise in the total turnover was only 5 percentage points.
The remaining transactions were executed through foreign exchange swaps and outright forwards,
comprising 23 percent and 2 percent, respectively, of all FX- deals in April 2013 (24 percent and 6 percent in
April 2010, respectively). The former group recorded an increase of 74 percent to a daily average of 367
million US dollars (211.4 million in April 2010), while the latter posted a decrease by 32 percent, to a daily
average of 37.5 million US dollars (55.4 million in April 2010).

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75%
2%
23%
0%
Foreign exchange market turnover by intrument
April 2013
Spot transactions Outright forwards
Foreign exchange swaps Currency swaps

Bulgarian lev, US dollar and Euro were the most actively traded currencies (Table 3). Foreign
exchange deals, with the Bulgarian lev on one side of the transaction, rose in both value and relative share
terms to 1 289.3 million US dollars and 79 percent, respectively (543.7 million and 62 percent in April 2010,
respectively). Foreign exchange deals with the US dollar on one side of the transaction (excluding
BGN/USD) increased in value terms to 274.9 million US dollars (232.8 million in April 2010), but its
relative share fell to 17 percent (27 percent in April 2010). The most actively traded currency pair was
BGN/EUR, which represented 78 percent of all FX-deals in April 2013 (60 percent in April 2010), followed
by USD/EUR which accounted for 16 percent of total (24 percent in April 2010). Transactions in other
currency pairs other than the Bulgarian lev, the US dollar and the Euro were negligible in value and relative
share terms (18.3 million US dollars and 2 percent in April 2010, respectively).
0% 20% 40% 60% 80% 100%
BGN/EUR
USD/EUR
EUR/OTHER
BGN/USD
USD/OTHER
BGN/OTHER
Other
Foreign exchange market turnover by currency pairs
2013
2010
2007

The growth of foreign exchange trading was driven by financial institutions other than the reporting
dealers (Table 4). They contributed 89 percent to the rise in the foreign exchange market activity in April
2013, and, as a result, their relative share increased to 66 percent (47 percent in April 2010). Remaining
transactions were executed as follows: 28 percent with reporting dealers (35 percent in April 2010) and 6
percent with non-financial customers (18 percent in April 2010).

4
243
174
146
305
411
158
448
1 077
100
0
200
400
600
800
1 000
1 200
with reporting
dealers
with other financial
institutions
with non-financial
customers
Foreign exchange market turnover by counterparty
Daily averages in April, in millions of US dollars
2007 2010 2013

The 2013 survey provided for the first time a breakdown of transactions with other financial
institutions which included the following subcategories: non-reporting banks, institutional investors, hedge
funds and proprietary trading firms, official sector financial institutions, and others (Table 4). Most FX-deals
were executed with official sector financial institutions (incl. central banks and international financial
institutions of the public sector, development banks and agencies), which represented 91 percent of all
dealers transactions with other financial institutions. Remaining transactions were distributed equally
between non-reporting banks (4 percent) and institutional investors (4 percent).
0 200 400 600 800 1 000
hedge funds and
proprietary trading firms
others
non-reporting banks
institutional investors
official sector financial
institutions
Foreign exchange market turnover
Other financial institutions
Daily averages in April 2013, in millions of US dollars

In terms of geographic allocation, 73 percent of total FX- deals (64 percent in April 2010) were
carried out with local counterparties (Table 2). The rest were cross-border.
The maturity structure of outright forwards and foreign exchange swaps in the interval less than one
year was as follows (Table 2): 67 percent of the transactions were with maturity of seven days or less (63
percent in April 2010), with the remainder being over seven days and up to one year (37 percent in April
2010). A very small fraction of transactions (0.3 million US dollars in April 2013) were with maturity over
one year.

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New data collected in the Triennial Survey show that 6 percent of dealers FX transactions were
conducted via a prime brokerage relationship with their clients (Table 1). About 2 percent of all FX volumes in
2013 were driven by trades of dealers with retail customers.


2. OTC interest rate derivatives turnover
The average daily turnover in the OTC interest rate derivatives market (forward rate agreements,
swaps and OTC options) in April 2013 amounted to 4.7 million US dollars (Table 5). In comparison, for the
same period of 2010 and 2007 it amounted to 3.3 million and 21.8 million US dollars, respectively.
0
20
2
0
3
0 0
5
0
0
5
10
15
20
25
Forward rate
agreements
Swaps Options and other
products
OTC interest rate derivatives turnover by instrument
Daily averages in April, in millions of US dollars
2007 2010 2013

Interest rate swaps were the only instrument, traded by dealers in April 2013 (like in April 2010)
marking an increase of 43 percent between the 2013 and 2010 survey. All transactions in April 2013 were
executed in euro, whereas in April 2010 they involved euro and US dollars.
16.6
1.6
3.6
3
0
1
1
1
3
0
4
8
12
16
20
with reporting
dealers
with other financial
institutions
with non-financial
customers
OTC interest rate derivatives turnover by counterparty
Daily averages in April, in millions of US dollars
2007 2010 2013

A great deal of transactions was executed with non-financial customers (Table 6), which represented
55 percent of the total (24 percent in April 2010). The relative share of transactions between reporting

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dealers decreased to 31 percent (76 percent in April 2010). Results from all three surveys, carried out since
2007, show that interest rate derivatives typically make up a very large share of cross-border transactions.




Global results of the 2013 Triennial Central Bank Survey of Foreign Exchange and Derivatives
Market Activity are available to the public on the BIS website at http://www.bis.org/publ/rpfx13.htm.

For additional information on the survey, please contact Nadya Nikolaeva (Phone: +359 (2) 9145
763 or e-mail: Nikolaeva.N@bnbank.org) and Diana Marinova (Phone: +359 (2) 9145 727 or e-mail:
Marinova.D@bnbank.org).






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Table 1
Foreign exchange market turnover by instrument
Daily averages in April, in millions of US dollars
Amount Share Amount Share Amount Share
Foreign exchange instruments 563.1 874.3 1624.7
Spot transactions 364.1 0.65 603.6 0.69 1216.6 0.75
Outright forwards 16.2 0.03 55.4 0.06 37.5 0.02
Foreign exchange swaps 178.4 0.32 211.4 0.24 367.0 0.23
Currency swaps 3.6 0.01 4.0 0.00 3.6 0.00
Options and other products 0.8 0.00 0.0 0.00 0.0 0.00
o/w prime brokered 104.7 0.06
o/w retail-driven 39.9 0.02
o/w related party trades 193.2 0.22 149.5 0.09
Instrument
2007 2010 2013


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Table 2
Foreign exchange market turnover by instrument, counterparty, maturity
Daily averages in April, in millions of US dollars
Amount Share Amount Share Amount Share
Spot transactions 364.1 603.6 1216.6
with reporting dealers 113.2 0.31 100.1 0.17 104.6 0.09
with other financial institutions 123.3 0.34 368.6 0.61 1021.2 0.84
with non-financial customers 127.6 0.35 134.9 0.22 90.7 0.07
Outright forwards 16.2 55.4 37.5
with reporting dealers 6.5 0.40 30.0 0.54 12.4 0.33
with other financial institutions 2.7 0.17 7.1 0.13 22.7 0.61
with non-financial customers 7.0 0.43 18.3 0.33 2.3 0.06
Up to 7 days 6.8 0.42 17.4 0.31 17.9 0.48
Over 7 days and up to 1 year 9.4 0.58 38.0 0.69 19.6 0.52
Over 1 year 0.0 0.00 0.0 0.00 0.00
Foreign exchange swaps 178.4 211.4 367.0
with reporting dealers 120.0 0.67 171.4 0.81 327.1 0.89
with other financial institutions 48.1 0.27 35.5 0.17 32.9 0.09
with non-financial customers 10.4 0.06 4.5 0.02 7.0 0.02
Up to 7 days 148.0 0.83 151.1 0.71 252.7 0.69
Over 7 days and up to 1 year 30.4 0.17 60.3 0.29 114.0 0.31
Over 1 year 0.0 0.00 0.0 0.00 0.3 0.00
Currency swaps 3.6 4.0 3.6
with reporting dealers 3.6 1.00 4.0 1.00 3.6 1.00
with other financial institutions 0.0 0.00 0.0 0.00 0.0 0.00
with non-financial customers 0.0 0.00 0.0 0.00 0.0 0.00
FX options and other products 0.8 0.0 0.0
with reporting dealers 0.1 0.13 0.0 0.00 0.0 0.00
with other financial institutions 0.0 0.00 0.0 0.00 0.0 0.00
with non-financial customers 0.7 0.88 0.0 0.00 0.0 0.00
Total 563.1 874.3 1624.7
with reporting dealers 243.3 0.43 305.5 0.35 447.8 0.28
with other financial institutions 174.1 0.31 411.2 0.47 1076.9 0.66
with non-financial customers 145.6 0.26 157.7 0.18 100.0 0.06
Local 303.5 0.54 562.0 0.64 1189.6 0.73
Cross-border 259.6 0.46 312.4 0.36 435.1 0.27
2010 2013
Instrument/counterparty/maturity
2007


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Table 3
Foreign exchange market turnover by currency pair
Daily averages in April, in millions of US dollars
Amount Share Amount Share Amount Share
USD / AUD 1.3 0.00 0.0 0.00 0.0 0.00
USD / BRL 0.0 0.00 0.0 0.00
USD / CAD 0.7 0.00 0.0 0.00 0.7 0.00
USD / CHF 2.2 0.00 0.3 0.00 0.2 0.00
USD / CNY 0.0 0.00 0.0 0.00
USD / EUR 251.3 0.45 205.7 0.24 253.8 0.16
USD / GBP 13.9 0.02 18.8 0.02 13.9 0.01
USD / HKD 0.0 0.00 0.0 0.00
USD / INR 0.0 0.00 0.0 0.00
USD / JPY 2.9 0.01 3.6 0.00 0.4 0.00
USD / KRW 0.0 0.00 0.0 0.00
USD / MXN 0.0 0.00
USD / NOK 0.9 0.00
USD / NZD 0.0 0.00
USD / PLN 0.0 0.00
USD / RUB 1.9 0.00
USD / SEK 0.0 0.00 0.0 0.00 0.1 0.00
USD / SGD 0.0 0.00
USD / TRY 0.0 0.00
USD / TWD 0.0 0.00
USD / ZAR 0.0 0.00 0.0 0.00
USD / OTH 0.6 0.00 4.4 0.01 3.1 0.00
EUR / AUD 0.0 0.00 6.7 0.01 0.1 0.00
EUR / CAD 0.1 0.00 7.3 0.01 0.2 0.00
EUR / CHF 10.7 0.02 20.3 0.02 25.9 0.02
EUR / CNY 0.0 0.00
EUR / DKK 0.0 0.00
EUR / GBP 13.4 0.02 16.4 0.02 9.0 0.01
EUR / HUF 1.8 0.00
EUR / JPY 4.0 0.01 1.6 0.00 15.6 0.01
EUR / NOK 0.7 0.00
EUR / PLN 0.7 0.00
EUR / SEK 8.0 0.01 0.6 0.00 0.2 0.00
EUR / TRY 2.8 0.00
EUR / OTH 0.2 0.00 26.8 0.03 3.5 0.00
BGN / AUD 0.0 0.00 0.0 0.00 0.0 0.00
BGN / CAD 0.0 0.00 0.0 0.00 0.1 0.00
BGN / CHF 0.1 0.00 0.4 0.00 0.4 0.00
BGN / EUR 219.1 0.39 524.8 0.60 1 264.4 0.78
BGN / GBP 1.0 0.00 1.1 0.00 0.7 0.00
BGN / JPY 0.0 0.00 0.2 0.00 0.1 0.00
BGN / SEK 0.1 0.00 0.2 0.00 0.1 0.00
BGN / USD 29.8 0.05 17.0 0.02 23.3 0.01
BGN / OTH 0.0 0.00 0.1 0.00 0.1 0.00
Other currency pairs 3.5 0.01 18.3 0.02 0.0 0.00
All currency pairs 563.1 874.3 1 624.7
2007 2010 2013
Currency pair


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Table 4
Foreign exchange market turnover by counterparty
Daily averages in April, in millions of US dollars
Amount Share Amount Share Amount Share
Total 563.1 874.3 1624.7
with reporting dealers 243.3 305.5 447.8
local 54.2 0.22 17.5 0.06 23.3 0.05
cross-border 189.1 0.78 287.9 0.94 424.5 0.95
with other financial institutions
174.1 411.2 1076.9
local 106.3 0.61 387.7 0.94 1067.5 0.99
cross-border 67.9 0.39 23.5 0.06 9.3 0.01
non-reporting banks 41.7 0.04
institutional investors 48.3 0.04
hedge funds and proprietary trading firms 0.4 0.00
official sector financial institutions 979.8 0.91
others 5.0 0.00
undistributed 1.6 0.00
with non-financial customers
145.6 157.7 100.0
local 143.0 0.98 156.7 0.99 98.8 0.99
cross-border 2.6 0.02 1.0 0.01 1.2 0.01
2010 2013
Counterparty
2007


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Table 5
OTC interest rate derivatives market turnover by instrument
Daily averages in April, in millions of US dollars
Amount Share Amount Share Amount Share
Interest rate instruments 21.8 3.3 4.7
FRAs 0.0 0.00 0.0 0.00 0.0 0.00
Swaps 19.8 0.91 3.3 1.00 4.7 1.00
Options and other products 2.0 0.09 0.0 0.00 0.0 0.00
Instrument
2007 2010 2013


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Table 6
OTC interest rate derivatives market turnover by instrument, counterparty
Daily averages in April, in millions of US dollars
Amount Share Amount Share Amount Share
FRAs 0.0 0.0 0.0
with reporting dealers 0.0 0.00 0.0 0.00 0.0 0.00
with other financial institutions 0.0 0.00 0.0 0.00 0.0 0.00
with non-financial customers 0.0 0.00 0.0 0.00 0.0 0.00
Swaps 19.8 3.3 4.7
with reporting dealers 15.3 0.77 2.5 0.76 1.4 0.31
with other financial institutions 1.6 0.08 0.0 0.00 0.7 0.14
with non-financial customers 2.9 0.14 0.8 0.24 2.6 0.55
Options and other products 2.0 0.0 0.0
with reporting dealers 1.3 0.64 0.0 0.00 0.0 0.00
with other financial institutions 0.0 0.00 0.0 0.00 0.0 0.00
with non-financial customers 0.7 0.36 0.0 0.00 0.0 0.00
Total 21.8 3.3 4.7
with reporting dealers 16.6 0.76 2.5 0.76 1.4 0.31
with other financial institutions 1.6 0.07 0.0 0.00 0.7 0.14
with non-financial customers 3.6 0.16 0.8 0.24 2.6 0.55
Local 6.5 0.30 0.8 0.24 1.1 0.24
Cross-border 15.3 0.70 2.5 0.76 3.6 0.76
2007 2010 2013
Instrument/counterparty