MINISTRY OF FINANCE OF THE REPUBLIC OF MOLDOVA State Treasury Liquidity management   Chisinau, October 2017

Legislative framework Law on Public Finances and Fiscal Responsibility # 181 dated July 25, 2014 Article 64: Within 30 days after adoption of annual budget laws, budget administrators shall develop annual liquidity forecasts for their budgets with monthly breakdown. The purpose of forecasting is to ensure efficient liquidity management for the government budget and local budgets.

general provisions on liquidity management Regulatory framework Before 2017 Methodological guidelines on cash execution of budgets comprising the national public budget: general provisions on liquidity management Liquidity forecasts (annual and monthly) for the government budget To be approved by Minister of Finance Allocation of government budget balances (on a daily basis) To be approved by Minister of Finance Since 2017 Methodological guidelines on cash execution of budgets comprising the national public budget: general provisions on liquidity management Regulations on Managing Liquidity in the Government Budget as approved by Minister of Finance Order # 3 dated January 9, 2017 Liquidity forecasts (annual and monthly) for the government budget To be approved by Minister of Finance Allocation of government budget balances (on a daily basis) To be approved by State Treasury Director

Regulations on Liquidity Management for the Government Budget Regulatory framework Types of forecasts Substance of forecasts Elaborate forecasts for revenues and expenditures Allocation of balances in the government budget Forecasting of sources to finance budget balance Updating / changing forecasts Regulations on Liquidity Management for the Government Budget Provisions Forecasts for transfers from the government budget to the government social insurance budget, CHI Funds, local budgets, and the Road Fund Forecasting of priority expenditures

Forecasting process participants 1. State Treasury 9. Other central and local public administration bodies 2. Consolidated Budget Department 8. Ministry of Agriculture, Regional Development and Environment 3. Public Debt Department 7. Ministry of Economy and Infrastructure 4. State Tax Service 6. National Social Insurance Fund 5. Customs Service

Forecasting Liquidity 1. Revenue administrators – revenue forecasts 2. Annual budget limits 3. Balances in TSA accounts Liquidity forecasts  (annual, monthly) 4. Statistical data and regulatory framework Forecast of receipts and payments 5. National Social Insurance Fund 6. Ministry of Economy and Infrastructure 8. Public debt 7. Ministry of Agriculture, Regional Development and Environment

in the following sequence: Forecasting priorities As a matter of priority, forecasting is done for payments envisaged by Article 67 of the Law on Public Finances and Fiscal Responsibility # 181 dated July 25, 2017, in the following sequence: meeting obligations on servicing of government debt / debts of administrative territorial units; expenditures on salaries, stipends, allowances, compensations, social payments, and social assistance; expenditures on compulsory health insurance for Government-insured persons; expenditures on heat and power resources; expenditures from emergency funds.

Annual forecast Structure of forecasts Chapter I: Revenues Chapter II: Expenditures Chapter III: Budget balance Chapter IV: Financing sources

Variations from the 2017 budget   Q I QI Total Q II Q III 9-Month Execution Q IV Q III-IV Total Annual Projection Variations from the 2017 budget Name 2017 Budget Execution QII Total HI Total Projection Q III Total Q IV Total January February March April May June July August September Q October November December (+;-) % 1 4 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. Receipts 31.889.0 2.027,6 2.160.6 3.512,7 7.700.9 2.369.8 2.544.5 3.012.2 7.926.5 15.627,4 2.544.2 2.558.3 2.946.6 8.049.1 23.676.5 2.573,4 2.517,7 3.121.4 8.212.5 16.261.6 100.0 1. Revenues managed by the State Tax Service 13.767.8 914.1 844.2 1.785.3 3.543,6 975.6 999.3 1.414.9 3.389.8 6.933,4 1.082.0 1.023.3 1.339.4 3.444,7 10.378.1 1.007.0 974.1 1.408.6 3.389.7 6.834.4 2. Revenues managed by the Customs Service 19.437.0 1.152.7 1.468.4 1.969.6 4.590.7 1.487.1 1.660.6 1.655.1 4.802.8 9.393,5 1.607.7 1.628.5 1.692.3 4.928.5 14.322.0 1.652.8 1.660.7 1.801.5 5.115.0 10.043.5 3.Other revenues 1.392.7 99.3 77.2 98.2 274,7 80.3 91.7 110.0 282.0 556.7 71.4 139.0 164.3 374.7 931.4 161.3 141.2 158.8 461.3 836.0 4. VAT and excise refunds -2.708.5 -138.5 -229.2 -340.4 -708.1 -173.2 -207.1 -167.8 -548.1 -1.256.2 -216.9 -232.5 -249.4 -698.8 -1.955.0 -247.7 -258.3 -247.5 -753.5 -1.452,3 II. Payments 34.408.4 2.850,7 2.542.6 2.851.3 8.244.6 2.576,7 2.526.2 2.839.4 7.942.3 16.186.9 2.454.4 2.538.2 2.840.4 7.833,0 24.019.9 3.533.1 3.231.4 3.624.0 10.388.5 18.221.5 1. Payroll 6.285.7 389.6 524.5 507.8 1.421.9 491.4 454.1 520.8 1.466.3 2.888.2 573.0 505.0 551.0 1.629.0 4.517,2 567.2 575.0 626.3 1.768.5 3.397,5 2. Goods and services 1.521.3 81.6 122.2 154.7 358.5 113.2 119.6 342.8 701.3 96.3 157.1 139.4 392.8 1.094.1 124.9 162.3 140.0 427.2 820.0 3. External debt service payments 421.5 31.3 32.5 30.5 94.3 17.9 37,9 18.9 74.7 169.0 25.6 47.7 31.7 105.0 274.0 25.2 65.0 57.3 147.5 252.5 4. Domestic debt service payments 1.581.7 129.0 122.3 134.3 385.6 86.8 69.2 79.9 235.9 621.5 71.5 59.4 44.2 175.1 796.6 680.2 59.3 45.6 785.1 960.2 5. Subsidies 868.4 43.2 89.0 66.7 198.9 81.7 51.6 74.6 207.9 406.8 70.4 68.0 85.9 224.3 631.1 82.5 80.2 237,3 461.6 6. Road Fund 1.079.7 210.0 90.0 390.0 76.0 228.0 618.0 120.0 296.0 914.0 42.7 23.0 165.7 461.7 1.079,7 7. Farm producers Subsidy Fund 868.1 101.0 130.4 97.5 328.9 4.4 0.3 4.7 333.6 2.0 108.0 443.6 150.0 166.5 424.5 534.5 8. Social benefits 356.6 28.1 20.2 21,9 70.2 18.2 26.0 23.7 67.9 138.1 25.0 36.6 87.6 225.7 35.4 47.2 48.3 130.9 218.5 9. Other payments (allowances, compensations) 1.687.0 94.7 101.8 222,1 79.8 116.6 161.2 357.6 579,7 104.3 87.1 182.4 373.8 953.5 188.7 233.4 311.4 733,5 1.107.3 10. Transfers between government budget and local budgets 9.230.5 709.6 596.2 788.0 2.093,8 646,9 681.0 1.027,2 2.355.1 4.448,9 667.3 772,2 784.0 2.173.5 6.622.4 775.1 765.4 1.0676 2.608.1 4.781.6 11. Transfers between government budget and Social Insurance Fund 6.176,3 898.0 431.7 512.1 1.841,8 673.3 541.6 402.2 1.617,1 3.458.9 405.9 398.5 396.8 1.201.2 4.660.1 433.6 535.1 547.5 1.516.2 2.717,4 12. Transfers between government budget and Mandatory Medial Insurance Funds 2.593.0 216.1 648.3 216,0 648,2 1.296,5 1.944.8 216.0 648.2 1.296.5 13. Capital stock 691.6 -21.4 13.8 34.6 27.0 19.0 25.5 29.2 73,7 100.7 49.8 63.9 53.3 167.0 267,7 102.6 165.3 156.0 423.9 590.9 14. Capital investments 372.3 3.7 4.8 8.5 9.5 17.1 15.7 42.3 50,8 25.3 34.4 43.8 103.5 154.3 54.7 79.3 84.0 218.0 321.5 15. Inventories 669.9 9.2 55.7 91.5 156.4 47.0 105.6 76.9 229.5 385.9 51.1 52.4 43.1 146.6 532,5 41.7 49.4 46.3 137,4 284.0 16. Other expenditures -0.2 -0.4 -1.0 -1,6 -4.4 -2.4 -2.6 -9.4 -11.0 -5.2 0.4 4.1 -0,7 -11,7 5.1 3.4 8.0 16.5 15.8 III. Balance -2.519.4 -823.1 -382.0 661.4 -543,7 -206.9 18.3 172.8 -15.8 -559.5 89.8 20.1 106.2 -343.4 -959,7 -713,7 -502.6 -2.176,0 -1.959.9 IV. Sources of financing 2.519.4 823.1 382.0 -661.4 543,7 206.9 -18.3 -172.8 559.5 -89.8 -20.1 -106.2 -216.1 343,4 959.7 713,7 502.6 2.176.0 1.959.9 1. DOMESTIC SOURCES 2.052.8 118.2 73.6 260.3 452.1 -166.3 21.8 2.4 -142.1 310.0 34.1 88.5 214.1 524.1 152.6 110.1 169.9 432.6 646.7 956.7 -1.096.1 46.6 1.1. Exchange rate valuation gains (losses) 20.3 -8.2 -16.3 -4.2 -35.3 -27,2 -31.4 11.0 -20.4 20,4 20.4 31.4 1.2 Income from government securities 886.7 -154.8 17.4 -97.7 -235.1 -8.8 -50.9 -266.8 -501.9 10.3 45.8 43.7 99.8 -402.1 97.7 192.7 292.5 -209.4 -23.6 1.3 Government securities as liquidity buffer 508.9 1.4 Privatization of government stakes in social enterprises 126.9 0.5 28.9 29.4 53,7 83.1 -10.0 73.1 21.1 32.7 53.8 1.5 STA liquidity borrowing /reimbursement 250.0 -250.0 1.6 Other domestic sources 530,3 64.4 86.5 153.1 -3.0 65.9 35.3 251.3 22.8 47.8 113.3 364.6 54.9 47.3 63.5 279.0 530.3 2. EXTERNAL SOURCES (net) 975.5 -57.6 857.3 -110.9 688.8 -71.2 229.8 -37.8 120.8 809.6 -67,3 -391.8 -166.9 -626.0 183.6 776.9 -138.3 153.3 791.9 165.9 2.1 Repayment -1.560,0 -57,6 -238,1 -110,9 -406,6 -48,1 -157,1 -563,7 -409,0 -166,9 -643,2 -1.206,9 -78,9 -147, 4 -126,8 -353,1 -996,3 100,0 2.2 Receipts 2 555,5 1.095,4 277, 9 277,9 1.373,3 17,2 1.390,5 855,8 9.1 280,1 1.145,0 1.162,2 3. Change in balance -508.9 762,5 -548.9 -810.8 -597,2 444.4 -269.9 -137,4 37,1 -560.1 -56.6 283.2 -30.8 195.8 -364,3 30.2 741.9 179.4 951.5 1.147,3 587,2 3.1 Opening balance 1.860,1 2.117,3 1.354, 8 1.903,7 2.714,5 2.270.1 2.540,0 2.677,4 2.734.0 2.450.8 2.481,6 2.451,4 1.709,5 3.2 Closing balance 2.369.0 2.714.5 2.270,1 2.734,0 2.450,8 2.4 8 1,6 2.451.4 1.530,1

Monthly forecasts Structure of forecasts Chapter I: Receipts Chapter II: Outlays Chapter III: Budget balance Chapter IV: Internal sources Chapter V: External sources Chapter VI: Changes in budget balance

Government Budget Liquidity Forecast May 2017 Approved:   Approved: Minister of Finance Ley, in thousands   2017 Budget 1/12 of Annual Budget Adopted Forecast May Week 1 Forecast Week 2 Forecast Week 3 Forecast Week 4 Forecast Week 5 Forecast 1 2 3 4 5 6 7 & 9 I. Receipts 31.774.237,4 2.476.911,5 2.671.542,8 354.569,4 308.561,7 676.255,2 932.840,0 399.296,5 1. Revenues 2476.911,5 2.450.922,6 257.332,0 290.606,9 618.661,2 840.639,1 443 683,4 1.1. Revenues managed by the State Tax Service 12.676.021.8 1.056.335,2 923.049,7 67.568,0 69.640.8 173.569 2 481 848,6 130.423,1 1.2. Revenues managed by the Customs Service 18.480.060.3 1 540 005,0 1.641.826,0 220.764.0 243.285,0 480.503,0 378.571,0 318.703,0 1.3. Other revenues 1.024.386,8 85.365,6 78.068,3 7.926,5 12.433,9 23.563.3 19.874,2 14.270,4 1.4. VAT and excise refunds -2.457.531.5 -204.794.3 -192.021,4 -38.926,5 -34.752,3 -58.974,3 -39.654,7 -19.713,1 II. Payments 34.259.228,3 2.854.935,7 3.200.188,9 1.369.085,5 560.415,3 499.673,6 516.706,4 254.308,1 2.1. Payroll 6.189.700,0 515.808,3 492.037,6 376.5214 75.411,2 21.356,8 12.369,7 6.378,5 2.2. Goods and Services 1.857.600,0 154.800,0 154.512,4 25.463,1 23.744,2 36.897,5 41.789,6 21.618,0 2.3. External debt service payments 1473.100,0 122.758.3 69.203,4 20.806,2 18.475,8 15.571.6 14.349,8 2.4. Domestic debt service payments 460 500,0 38.375,0 51.035,9 4.268,1 5.610,5 21.064.6 20.092,7 0,0 2.5. Subsidies 831.500,0 69 291 7 54.613,7 2.356,0 37.896,0 11.321,4 3.040,3 2.6. Road Fund 1430.000.0 119.166,7 76.000,0 40 000,0 36 000,0 2.7. Farm producers Subsidy Fund 900.000,0 75.000,0 2.8. Social benefits 313400,0 26116,7 22623,1 7.2334,4 3.127,0 6.521,0 4 120,0 1.621,7 2.9. Other payments (allowances, compensations) 1719500,0 143291,7 111.416,8 3.561,8 7.561,4 9.524,3 81.189,5 9.579,8 2.10. Transfers between government budget and local budgets 8.310.396,0 682425,1 714466,2 401.274.7 88.630,0 125.000,0 99.561,5 2.12. Transfers between government budget and Social Insurance Fund 6105204,9 508767,1 768.903,5 465.350.6 273.552.9 30.000,0 2.13. Transfers between government budget and Mandatory Medial Insurance Funds 2.593.027,4 216.085,6 108.000,0 108.085,6 2.14. Capital stock 1.063.900,0 88658,3 58.076,9 52.3 6.233,0 13.122,4 29.563,4 9105,8 2.15. Inventories 1006100,0 83.841.7 72.476,3 178,9 6.524,1 17.593,6 34.554,8 13.624,9 2.16. Other expenditures 4 800,0 400,0 III. Balance (с.4-с.12) -2.484.990,9 -378.024,2 -528. 646,1 -1.014.496,1 -251.853,6 176.581,6 416.133,6 144.988,4 IV. DOMESTIC SOURCES 188.500,0 112.900,0 244.500,0 30.800,0 -99.700,0 -100.000,0 4.1 Transactions in government securities -268000,0 13.500,0 12.900,0 -5.500,0 30.300,0 -24.700,0 4.2 Government securities as liquidity buffer 4.3 STA liquidity borrowing /reimbursement 175.000,0 100 000,0 250.000,0 -75 000,0 -100 000,0 1.4 Other domestic sources 4.3 Borrowing from/reimbursement to National Social Insurance Fund V. EXTERNAL SOURCES 1506500,0 69.095,9 6.828,1 11 110,5 28.064,6 23.092,7 5.1 Conversions-payments from foreign currency accounts 3 404 700,0 111.387,9 7.633,1 23.475,0 53.071,1 27.208,7 5.2 External debt payments -1.898.200,0 -42.292,0 -805,0 -12.364,5 -25.006,5 -4.116,0 VI. Change in balance 271.050,2 394.763,0 -3.756,9 -235 446 ,2 -339.526,3 -44933,4 6.1 Opening balance 1.003.879,9 109.111,9 112.868,8 348.315,0 637.841,3 6.2 Closing balance 732.829,7 687.341,3   Government Budget Liquidity Forecast May 2017   Approved: Minister of Finance Ley, in thousands

02 01 05 03 04 Accumulation of balances by the end of month Transfers to local budgets 05 Servicing of public debt and other priority payments 01 50 mln leus ($2.8 mln) 200 mln leus ($11 mln) 300 mln leus ($17 mln) Transfers to the Government Social Insurance budget 02 800 mln leus ($44 mln ) 03 Salaries 250 mln leus ($14 mln) Transfers to CHI Funds 04 50 mln leus ($2.8 mln)

Approved: Director, State Treasury Needs Approved   Approved: Director, State Treasury Needs Approved I. TOTAL TREASURY LIQUIDITY: ECO Code 1.060.944.403,47 1. Opening balance as of May 31, 2017: 1.1 General government budget revenues, opening balance 995.808.184,13 1.2 Receipts as of May 30, 2017 98.107.022,58 1.3 Unallocated balance as of May 30, 2017 962.837.380,89 2. Income from transactions in government securities: 0,00 II. TOTAL ALLOCATIONS (1+2+3+4+5+6+7) 406.389.169,10 77.117.886,92 1.Capital transactions 1.1 Repurchase of government securities 513120 1.2 Interest on government securities 242200 Payments (2+3+4+5+6+7) 2. General payments executed by the State Treasury 42.403.856,92 21.702.786,92 2.1 Return of receipts of unknown origin 14.545.422,46 14.544.676,66 2.2 Transfers of shared revenues to local budgets 7.097.853,09 2.4 Reimbursement of liquidity borrowed from self-regulated government agencies 2.5 National Bank of Moldova – retention of fees as per Agreement of December 18, 2005 222970 60.257,17 2.7 Fees for bank services provided to territorial Treasury offices 2.8 Moldova Post service fees 2.11 Executive fees 28136;2814 700.324,20 3. Transfers to 1st tier local budgets 2912 82.602.510,57 4.797.373,64 4. Transfers to 2and tier local budgets 2911 216.810.962,34 18.903.678,52 5. Transfers to Nation Medical Insurance Company 2922 б. Transfers to National Social Insurance Fund 2921 7. Financing of Territorial Treasury Offices 64.571.839,27 31.714.047,84 7.1 Payroll 21; 281600 634.076,16 611.412,70 7.2 Allowances 2812 111.580,00 7.3 Social benefits 27 158.480,27 7.4 Energy, communal, and information services 222(1;2;3;94) 2.044.352,44 1.725.975,53 7.5 Payments against executive documents 28136,28139,281 34.578,01 7. б Business trips 2227 1.712.702,40 1.697.666,88 7.7 Services 222 2.653.932,20 2.609.854,21 7.8 Inventories 33 1.353.353,78 1.329.713,42 7.9 Capital stock 31 2.814.190,70 2.751.946,70 7.10 Government reserves 32 7.11 Other payments 2818;2819;2821; 2829,2811;2815 24.429,00 7.12 Subsidies 25 35.948.880,98 4.948.880,98 7.13 Payments financed by budget organizations 3.567,85 7.14 Return of receipts of unknown origin 5 44.323,68 7.15 Other non-financial assets 34;35;36;37 7.16 Foreign currency exchange requests 613000 17.033.391,80 15.661.638,61 7.17 Priorities set by budget execution authorities III. FINAL BALANCE 983.826.516,55 USD EUR Head of Liquidity Management Department: 18.2215 20,3270  

Transfers from the government budget to local budgets are made on a monthly basis in accordance with the Law on government budget, with 1/10 of the annual amount provided during the first six months; and 1/15, during the remaining 6 months. are made on a monthly basis in accordance with the forecasts and on the basis of payment documents uploaded in the MoF information system, marked by groups according to the functional classification as follows: Education: NV Culture, youth, and sports: SP Social assistance: AS Road Fund: FD General-purpose transfers: Earmarked transfers: Маркировка переводов позволяет отслеживать балансы фондов ЛБ по группам для сопоставления с потребностями их финансирования и осуществлять переводы из ГБ в объеме, необходимом для покрытия потребностей

(public procurement contracts) Plans for the future There are plans to introduce Collection of forecasts from central public administration bodies (ministries and agencies) Schedule of payments (public procurement contracts) Automated forecasting process

Thank you for listening If you have any questions, please feel free to ask