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which acquired approximately 34% of the total issuance volume for their clients within the framework of trust management.
CASH: After experiencing outflows in March-April, primarily due to tax payments, corporate funds rebounded in May, increasing by 548bn rubles or 1.2%. The key driver of this growth was the inflow of funds from oil and gas as well as mining companies.
The increase was primarily seen in funds denominated in Russian rubles, which grew by 764bn rubles or 2.1%. However, funds held in foreign currency decreased, with a decline of 2.7bn US dollars or 217bn rubles in ruble equivalent, representing a decrease of 2.3%.
This shift can be attributed to various factors, including changes in exchange rates, international trade dynamics, and corporate financial strategies. The increase in funds denominated in rubles indicates a preference for holding assets in the local currency, which may be influenced by currency stability and market conditions.
GOVERNMENT FUNDS: In May, government funds experienced a significant increase of 1.0 trillion rubles, representing a growth rate of 11.4%. This growth can be attributed to inflows from the Federal Treasury (0.4 trillion rubles, primarily through repo transactions) and regional authorities (0.6 trillion rubles).
The inflow of government funds was primarily driven by tax revenues collected in April and May. In April, the tax payment deadline fell on the last working day of the month, resulting in the funds being deposited with the Federal Treasury and subsequently allocated in May.
The increase in government funds signifies the financial strength and stability of the government sector. These funds play a crucial role in supporting public expenditures, financing infrastructure projects, and ensuring the smooth functioning of the economy.
The inflow of funds from the Federal Treasury, particularly through repo transactions, indicates the government's proactive approach to managing liquidity and optimizing cash flows. Repo transactions involve the sale of securities with an agreement to repurchase them in the future, providing short-term liquidity to the government.
The substantial inflow of funds from regional authorities reflects their contribution to the overall fiscal position of the government. Regional authorities collect taxes and other revenues within their jurisdictions, which are then transferred to the central government for allocation and distribution.
8.1.7 Banks specific issues
The mortgage portfolio of Russian banks edged up by 2.2% in May to RUB15.3 trillion ($188.9bn), the Bank of Russia reports on June 23. "According to preliminary data, mortgage loans continued growing at a high rate in May (+2.2%), which is in line with the level in March - April
114 RUSSIA Country Report July 2023 www.intellinews.com