1. Treasury Single Account Cash Balance Management Transactions
Financial and Fiscal Transactions Department
Treasury Single Account Cash Balance Management Transactions
Moscow
2018

2. Key Objectives of the Transactions
Ensure regular and frequent conduct of transactions
guarantee a certain minimum amount of transactions
approximate supply to demand based on financial market situation data
offer a range of transactions varying in execution times
offer an open and accountable mechanism for transactions
use an up-to-date effective trade platform
make Federal Treasury’s transactions a “guiding light” for the financial market

3. Key Elements of Transactions
Balance Management by the Treasury of Russia
Legal and Regulatory Framework
Harmonizing decisions within the public finance administration
Modern payment and account and trade infrastructure
Full financial reporting
Effective risk-management mechanisms
Software, information and telecommunication infrastructure
Transparency and Accountability of the Transaction Process

4. Select Elements of Transactions
Legal and Regulatory Framework
Budget Code, sectoral laws;
Rules approved by the Government;
Operating procedures approved by regulations of the MoF and Treasury;
Treasury’s internal orders organizing operation.
Transparency and Accountability
All decisions are taken exclusively on the basis of public requests;
Timely disclosure of information;
All actions are regulated by the regulatory framework.
Harmonizing decisions
All mechanisms are coordinated among the Bank of Russia, MoF and Treasury;
All decisions regarding transaction parameters are subject to mandatory coordination among the Bank of Russia, MoF and Treasury;
Daily information exchange between the Bank of Russia and Treasury.

5. Main Transaction Development Stages
MoF and Treasury management’s decision
on the need to manage liquidity
Placing funds in bank deposits – first Central Bank-MoF-Treasury transactions
Creating regulatory framework for depositing funds in banks
Deposits – anti-crisis tool of the Government of the Russian Federation
New placement mechanism for Treasury deposits
A new Treasury’s power – managing balances
Loans to Subjects of the Russian Federation
Purchasing foreign currency
Loans to municipalities
Deposits in foreign currency
Floating rate REPO
Currency Swap
On-demand deposits
Floating rate deposits
On-demand deposits
Purchasing foreign currency at currency exchange
Fund-raising
tools
Overnight REPO
Multiple-day REPO

6. Main Transaction Development Stages
MoF and Treasury management’s decision
on the need to manage liquidity
Placing funds in bank deposits – first Central Bank-MoF-Treasury transactions
Creating regulatory framework for depositing funds in banks
Deposits – anti-crisis tool of the Government of the Russian Federation
New placement mechanism for Treasury deposits
A new Treasury’s power – managing balances
Loans to Subjects of the Russian Federation
Purchasing foreign currency
Deposits in foreign currency
Loans to municipalities
Floating rate deposits
On-demand deposits
Floating rate REPO
Currency Swap
On-demand deposits
Deposits with central counteragent
Multiple-day REPO
Fund-raising
tools
Overnight REPO

7. Floating Rate Contract
Floating vs Fixed Rate
Fixed Rate Contract
Floating Rate Contract
% changes to match the market situation
Conditions are more in line with the real market situation
% remains unchanged over the entire effective contract period

8. Purchasing securities under REPO agreements
Types of Transactions
Purchasing securities under REPO agreements
Placing funds as bank deposits
In RUR and foreign currencies
Loans to budgets of the Subjects of the Russian Federation and local budgets
Purchasing foreign currencies

9. Placement of Federal Budget funds as bank deposits
deposit account 

10. Depositing Requirements for Credit Institutions
2008
2018
2017
General License issued by the Bank of Russia
Equity (capital base) no less than 5 bn RUR
International rating no lower than investment grade (Fitch-Ratings, Standard & Poor’s, Moody’s Investors Service)
General License issued by the Bank of Russia
Equity (capital base) no less than 25 bn RUR
Russian rating no lower than investment grade (AKRA and RAEX) or equity of 100 bn RUR and the Bank of Russia’s control
24 banks
17 banks
General License issued by the Bank of Russia
Equity (capital base) no less than 250 bn RUR
Russian rating no lower than investment grade (AKRA)
6 banks

11. Diagram of Deposit Placement with Banks
Treasury of Russia
Placement Terms 1 3
Corpus of Offers
Bidding
Cut-off Rate 4 2
Requests for funds within the limit
Offer
Trade Mechanism (Exchange Application SW)
Funds Transfer 5 7
Contracting
Credit Institutions 6
Acceptance of Offer 9
Receipt of Funds 8
Statement submission 9

12. Outcomes of Depositing Funds with Banks
As of October 1, 2018
Amount deposited
Amount of Incomes
49,381.19
bn. RUR
358.52
bn. RUR
Bank of Russia’s exchange rate: 1Euro = RUR
647.8 bn. €
4.7 bn. €

13. Securities Purchase (Sales) Transactions under REPO Contracts
Repurchase operation (or repo)

14. Bidding Procedures Diagram for REPO Transactions Sovereign securities
Roster of offers, roster of contracts
MoF of Russia
Treasury of
Russia
Selection criteria, cut-off rate
Report 6
Bank of Russia
Offers to purchase
Bank of Russia 1
Sovereign securities 3
Cut-off rate
Corpus of offers
Execution of transactions 4
Bidding Procedures 5 2
Offers to sell (limit)
(Depository, Clearing Agency)
Trading Mechanism
Budget Funds
Lending institutions
Execution of transactions 5

15. Outcomes of REPO Transactions
From 2015 – 2018
As of October 01, 2018
Amount Placed, bn. RUR
Amount of incomes, bn. RUR
7 and more days
7 and more days
106,275.2
68.1
Bank of Russia Euro exchange rate as at October 01, 2018
1 EUR = RUR
bn. €
0.9 bn. €

16. Loans to Budgets of Subjects of the Russian Federation and Local Budgets

17. Basic Budget Lending Terms1.
Loans shall be provided by the Russian Federation (Treasury) to Subjects of the Russian Federation and Municipalities. 2.
The Federal Treasury Management enters into an Agreement with the Borrower, in the place of the account (40204), for the current fiscal year. 3.
The loan shall be provided out of the Federal Budget single account balance. 4.
The loan amount shall not exceed one twelfth of the budget revenues, with the exception of subsidies, subventions and other intergovernmental transfers of targeted nature. 5.
The interest rate is 0.1% p.a. 6.
Loan tenor shall not exceed 90 days and the loan shall be repaid no later than November 25. 7.
To obtain a loan, a Loan Agreement shall be entered into (3 working days from the day of request to the day of funds receipt). 8.
Only one loan shall be provided at one time. 9.
Loan shall not be provided if there exist budgetary funds placed as bank deposits.

18. Budget Loan Granting Diagram
FT territorial branch
Borrower’s account
40201,40204
FT CO 3
Funding request (on the 2nd day) 4
Account reinforcement (on the 4th day)
FFTD 6
Borrower’s reporting
(every 10 days) 2 1
Supplementary agreement to the Agreement (Loan Agreement) signed by the Borrower
(loan amount, tenor, total interest, dates of receipt and repayment)
(in 4 days)
Checklist:
-powers of officials
Abiding by the funding limit (1/12 of revenues)
Tenor not exceeding 90 days
Repayment no later than November 25
% rate in compliance with the law on the budget
restrictions
Borrower
(represented by
an authorized body) 5
Signature of the loan agreement and transfer of funds (on the 4th day)
Or denial 18

19. Budget Loan Provision Results Subjects of the Russian Federation
For
As at October 01, 2018.
Bank of Russia’s Exchange Rate as at : 1 EUR = RUR
43.9 bn. €
4.1 bn. €
Subjects of the Russian Federation
Municipalities
3 343,6
млрд руб.
3,343.6
Bn. RUR
Year
Subjects of the Russian Federation
Municipalities
2014
521.6 - 
2015
869.6
47.2
2016
758.6
89.6
2017
729.2
109.7
2018
(as at October 1, 2018)
464.5
69.7
TOTAL
3,343.6
316.2
316,2
млрд руб.
316.2
Bn. RUR

20. Purchasing Foreign Currency

21. Basic Terms of Purchasing Foreign Currency
The Treasury places the foreign currency purchased in the bank currency accounts opened at the Central Bank in the name of the Federal Treasury.
Interest is paid on the balances of the Treasury’s foreign currency accounts with the Central Bank.
The volumes of purchases and sales of foreign currencies are determined by the Treasury in coordination with the MoF in a way that ensures uniform conversion of funds within the planning period.
Volume of foreign currency purchase and sales transactions depends on the Federal Budget oil and gas revenues, exceeding the amount considered as basis when drafting the budget for the current year:
All amounts exceeding USD 40 per barrel.
Purchase/sales of foreign currencies at the domestic currency market:
“in order to improve stability and predictability of domestic economic conditions and reduce the impact of the variable energy market situation on the Russian economy and public finance”

22. Foreign Currency Purchase Diagram
Treasury of Russia
Transfer of revenues
Bank of Russia 3
Treasury’s Account 2
Foreign Currency Purchase 4
Information on the results of the currency purchase
Order to utilize surplus oil and gas revenues 1
MoF

23. Foreign Currency Purchase Statistics
Purchased currency equivalent to
10,000.0 mln. RUR.
Purchased currency equivalent to
202, mln. RUR
Purchased currency equivalent to
829,130.0 mln. RUR
Purchased currency equivalent to 2,742, mln. RUR
Interest paid
0.6 mln. RUR
Interest paid
9.9 mln. RUR
Interest paid
1,183.2 mln. RUR
Transferred to NWF
Transferred to the Reserve Fund
Bank of Russia’s Exchange Rate as at : 1 EUR = RUR
131.2 mln. €
2,653.1 mln. €
10,876.8 mln. €
35,970.9 mln. €

24. 165,416.6 444.7 OUTCOMES (2008-2018) Balance Management
As at Oct. 1, 2018.
Placement Volume
Amount of Accounted Revenues
165,416.6
Bn. RUR
444.7
Bn. RUR
Bank of Russia’s Exchange Rate as at : 1 EUR = RUR
2, bn. €
5.8 bn. €

25. Risk Management in the Course of Transactions
TSA Cash Balance Management
Day-to-day risk management
Current External Risk Management
Preventive measures
Organize internal control
Functional delineation (front-office, back-office, middle-office)
Legal Framework:
Establish requirements for lending institutions (gen. license, equity, good standing on the FT-related transactions, etc.)
Empower Treasury to:
directly debit a lending institution’s arrears on deposit transactions and REPO agreements;
Debit arrears on budget loans from the incoming revenues of regional or local budgets;
Transparency of transactions (
Quality Assurance Agreement with counteragents (PAO Moscow Exchange, NSD)

26. Future Evolution of Transaction Types
New Cash Placement Transactions
New Fund-Raising Transactions
Placement of state-owned entities
Future Evolution of Transaction Types
On demand
Currency swap
Purchase/sales of foreign currency at the exchange
Deposits with the central counteragent
Currency swap
Direct REPO
Contracting loans for the cash gap (MoF of Russia)
Extrabudgetary Funds