Page 76 - RusRPTAug23

exchange rate stability and economic conditions. Additionally, overseas transfers and cash withdrawals during the vacation season can also impact foreign currency balances.
The slower growth in escrow accounts is a natural consequence of the completion of construction projects. As more properties are finished and ready for occupancy, the need for escrow accounts to hold funds during the construction phase diminishes.
In June, government funds saw a significant increase, rising by 1.1 trillion rubles (+11.7%), primarily driven by funds from the Federal Treasury (1.4 trillion rubles, approximately 50% through repurchase agreements).
The inflow of government funds was largely supported by tax revenues for the month of June, along with income generated from investing funds from the National Wealth Fund (estimated at around 0.3 trillion rubles). These combined sources contributed to the substantial growth in government funds.
Furthermore, the Federal Treasury enhanced its cash management flexibility by implementing a replenishable bank deposit agreement on the unified treasury account. This strategic move reduced the risk of cash shortfalls and allowed for greater allocation of funds in banks.
The rise in government funds is a positive indicator of the overall financial health of the country. Robust tax revenues and prudent investment strategies have helped to bolster the government's financial position.
The National Wealth Fund (NWF) plays a significant role in managing Russia's financial reserves. The income generated from investments made by the NWF contributes to the overall growth of government funds and supports various government initiatives and projects.
The use of repurchase agreements (repos) has proven to be an effective tool for managing government funds and providing liquidity in the financial system. Repos allow the government to temporarily sell securities and agree to repurchase them at a later date, which helps maintain cash flow and support market stability.
The Federal Treasury's decision to launch a replenishable bank deposit agreement reflects its proactive approach to cash management. This move ensures that sufficient funds are readily available when needed, reducing the risk of any cash flow disruptions.
76 RUSSIA Country Report August 2023 www.intellinews.com