Financial returns from placing budget funds of St Petersburg in repo agreements reached an all-time high

24 August 2022
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From 1 January to 31 July 2022, the St Petersburg Finance Committee placed more than RUB 318 billion in repo agreements with collateral management by National Settlement Depository (NSD).

Ilgiza Khafizova, Deputy Chairperson of the St. Petersburg Finance Committee, said:

"The use of the repo instrument in current economic conditions allows the Committee to place surplus balances in the St. Petersburg unified budget account against security in the form of highly liquid issues of federal loan bonds and St. Petersburg fixed and floating rate government bonds, while NSD's collateral management system reduces the operational burden on its clients and limits the credit risks of the St. Petersburg Finance Committee.

Following the resumption of trading in OFZs and bonds of constituent entities of the Russian Federation on Moscow Exchange in April 2022, we ramped up repo volumes. As of 23 August 2022, repos account for 30.2% of the balance of budget funds invested in liquid assets. In total, the gain from the allocation of the unified budget account as at 1 August 2022 reached a record high of RUB 14.3 billion."

Alina Akchurina, Managing Director for Collateral Management and Tri-Party Services, said:

"The steady increase in cash placed in repos with collateral management by NSD evidences the demand and importance of the instrument for the financial market. NSD's infrastructure makes it possible to place budget funds safely and quickly, expanding opportunities for participants."

The St. Petersburg Finance Committee has been conducting repo transactions with collateral management by NSD since 2019, as part of St. Petersburg Vice-Governor Alexey Korabelnikov's initiative to introduce digital technologies and platform solutions in public administration.  Repos are backed by a basket of OFZs and fixed and floating rate bonds of St. Petersburg. The terms of repos range from one day to 21 days.  Repo auctions are conducted on NSD's digital infrastructure platform, which complies with all information security principles and meets the requirements of the digital economy.

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