1. THE RELATIONSHIP BETWEEN CASH MANAGEMENT AND CENTRAL BANK
TURKISH TREASURY
Cash Management Department

2. Legislative Framework
Contents 1
Cash Management & Central Bank 2
Legislative Framework
Coordination between Treasury and Central Bank 3
Operational Issues 4 5
Conclusion

3. Cash Management & Central Bank
Budgetary Payments and Collections 1 2
Debt Management
Payments by Treasury to general budget institutions and transfers from general budget are made through CB
CB acts as the fiscal agent of Treasury at the bond auctions
Treasury provides significant input for CB’s liquidity management and there is a n active cordination between Treasury and CB
Treasury TL and FX reserves are remunarated at CB. .
Liquidity Management
Remuneration of Treasury Reserves 3 4

4. Legislative Framework – I : General Overwiew
CB Governance, Treasury&CB Relationships,
Liquidity Management
Law no CB Law
Law no Law on Public Finance and Debt Management
Law no Treasury Law
Budgetary Payments and Collections
Law No 5018 – Law on PFMS Regulation on CB Tariffs
Decree on Public Electronic Payment System Correspondent Bank Protocol
Treasury Internet Banking System Protocol between Treasury and CB
Debt Management
Aforementioned Laws (no. 1211, 4749) and Secondary Legislation
Financial Services Agreement between Treasury and CB
Remuneration of Treasury Reserves
- Aforementioned Laws (no. 1211, 4749)
- Remuneration Protocol between Treasury and CB

5. Legislative Framework – II : CB Governance & Relationship Between Treasury and CB
Role of Treasury
Role of CB
The Central Bank shall be the financial and economic advisor, the fiscal agent and the treasurer of the government (Art 4).
At least 51 percent of the Central Bank’s A class shares shall belong solely to the Treasury (Art 8).
Preference of Treasury is an important factor in the domination of the CBRT Board which is selected by the General Assembly.
The Undersecretary of the Treasury or Deputy Undersecretary to be designated by him/her may participate to the meetings in a non-voting capacity
The procedures and principles regarding payment of interest on the deposits belonging to the Undersecretariat of Treasury shall be set forth jointly by the Bank and the Undersecretariat of Treasury (Art 41).
The Central Bank may not grant advance and extend credit to the Treasury and to public establishments and institutions, and may not purchase debt instruments issued by the Treasury and public establishments and institutions in the primary market (Art 56).
It provides all kinds of services like money transferring and money orders with fee. CBRT pays interest for the domestic and foreign currency based deposits of Treasury.
Content Layouts

6. Monetary Policy Committe Monthly Coordination Meetings
Coordination Between Treasury & Central Bank
Monthly meetings held at Director General level.
DG of Markets from CB and DG of Public Finance (Cash, Debt and Risk Management) from Treasury
Main discussion topics:
Recent developments in fiscal policy, budgetary developments, borrowing program,
Recent developments in liquidity management,
A strong ad-hoc communicational channel between Treasury and CB employees.
Frequent thematic meetings about on-going projects.
Monetary Policy Committe
Monthly Coordination Meetings
Ad-hoc Communication
The Undersecretary or Deputy Undersecretary participate in the meetings without having the right to vote.
A means of high level coordination between monetary and fiscal policies.

7. Operational Issues Function Related Legislation/Agreement/Protocol
Main Operational Issues Handled
Budgetart Payments and Collections
Treasury Internet Banking Protocol
Payments from Treasury accounts to general budget institutions Timing of payments Real time monitoring of Treasury accounts Contingency manual
Decree on Public Electronic Payment System
Budgetary payments of general budget institutions Respective responsibilities of MoF, Central Bank and Treasury Infrastructure for daily cash requests of general budget institutions
Regulation on CBRT Tariffs
Unit prices for each kind of transaction realized by CBRT on behalf of Treasury
Correspondent Bank Protocol
Responsibilities of correspondent bank with regards to general budget collections Timing and contingency framework
Debt Management
Financial Services Agreement
Procedures and commissions regarding redemption of Treasury bills and bonds
Remuneration of Treasury Reserves
Remuneration Protocol
Mechanism for the remuneration process Interest rates and accounts to be remunerated

8. Conclusion
With the central bank reform and public finance and debt management law after 2001 a strong governance framework for CB has been established.
The relationships between Treasury and CB has been grounded on a more professional manner as completely two separate entities with their own goals and agenda.
With public financial management reform by law 5018 and decree on public electronic payment system along with the new design of TSA in a modern manner, CBRT has undertaken a broader role in the payment processes.
All aspects of cash, debt and liquidity management requires a strong coordination between Treasury, CB and MoF.
In Turkey’s case this challenge is handled mostly by a clear documentation of roles and responsibilities by the relavant legislation and agreements.
Nevertheless, the importance of informal and ad-hoc communication and collaboration culture among those institutions could never be undermined.