The currency board arrangement operated in Bulgaria would remain stable even in the case of a sweeping conversion to euro on the part of Bulgarian households, analytical unit Raiffeisen Research said in its Bulgaria Currency Board Special overview. According to the latest data as of the end of 2007, foreign exchange (FX) reserves grew 33.7% YoY to EUR 11.94bn. The monetary base thus accounted for 60.8% of the official foreign reserve, said Raiffeisen Research. This ratio was traditionally even lower until September 2007, when the BNB increased the minimum reserve ratio by 4 percentage points to 12% effective September 1. Thus, the share of the monetary base that represents banks' reserves with the BNB increased substantially after the hike. In fact, even if the entire BGN-denominated portion of the broader money supply aggregate - M2, is considered, the foreign currency reserve still covers 90.6% of it (end of Dec '07, 99.3% end of Nov '07). This means that hypothetically, if the money in circulation, the bank deposits with the BNB and all of the local currency denominated deposits were to be converted into euro (in case of panic) the official reserve would still suffice to meet this demand. Hence, the stock of foreign currency reserves is more than adequate not only compared to the level of reserve money, but also to the broader money supply aggregate (M2), said Raiffeisen Research. The last few years have all ended with fiscal surpluses and 2007 should not be an exception. In November, the government's year-to-date surplus reached 7.1% of the projected GDP due to the over-collection of tax revenues, which far exceeded original projections.