The St. Petersburg Committee of Finance and National Settlement Depository (NSD) have announced the launch of a new instrument to manage St. Petersburg budget’s liquidity – repo trades with an OFZ basket performed using NSD’s collateral management system.
The trades will be concluded on the St. Petersburg Currency Exchange. Cash and securities settlements, and clearing and collateral management services will be provided by NSD.
“We are happy to expand the range of high quality services for managing liquidity. The repo mechanism is the optimal tool to safely place temporarily available budget balances, because there is no need to choose either an instrument’s profitability or reliability. The wider circle of borrowers may get access to repos on the basis of tender procedures, as the loans will be backed by liquid securities; hence, instrument profitability will increase. The instrument becomes more reliable as we will use NSD infrastructure for it,” said Alexey Korabelnikov, Chairman of the St. Petersburg Committee of Finance.
“NSD has reliable post-trade infrastructure which has been successfully used on the federal level for Bank of Russia and Federal Treasury of Russia repos. We think that our partnership with the St. Petersburg Committee of Finance will open up new opportunities for Russian constituent entities to increase the effectiveness of liquidity management using this instrument,” added Alina Akchurina, Managing Director for Collateral Management Systems Development, NSD.
The new product was presented on 19 April at the webinar, and on 23 April – at a press conference in St. Petersburg. Among guests of two events were more than 30 banks interested in new liquidity management tools, and representatives of Russian constituent entities.