Bubble echo at home

In our country due to the global uncertainty and declining liquidity from October 2007 began the fall of indices and daily turnover. For the period from mid-October 2007 to mid-October this year the SOFIX index has lost almost 70% of its value.
– Increased risk perceptions and lower liquidity in international reflected on the behavior of commercial banks. As of mid-October 2008, the spread between LEONIA and EONIA indices reached approximately 250 basis points at levels below 20 basis points in the middle of last year. On October 21, the BNB Governing Council adopted amendments to the regulation of minimum reserves. This has an impact on the currency market and the average interest rate started to decline, the demand for short-term liquidity decreased and the spread shrank to 176 basis points
– Foreign direct investments in the country were also affected by the crisis. Comparison initially published estimates for Bulgaria shows a rise in FDI by 10% for the first half of 2008 compared to the corresponding period of 2007. In July and August 2008 there were declines in FDI compared to the corresponding months of 2007 and from the beginning the year the inflow of direct investments in the real estate sector namalyava.Te declined significantly against most other industries for the first half of the year.
– International Crisis positive influence on the prices of fuel and food in international trade. The decline in the number of international prices have an impact on inflation in Bulgaria, as in August and September was working towards suppressing fuel inflation.
– The crisis in international financial markets has no direct effect on the balance of Bulgarian banks, as their credit activity is directed towards Bulgarian economy and no exposures in US securities.
In our country the turmoil in international financial markets have had an impact mainly on the appreciation of the cost of financing in the domestic money market, increased interest rates on deposits and loans and a decline in stock indices.