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Debt Management

Cash Management

Created : 18.07.2017. Updated: 03.10.2017.

The Treasury of the Republic of Latvia is responsible for management of all of the financial resources available in Treasury’s accounts and ensurance of liquidity.

The Treasury has been in charge of cash management since resuming the Treasury operations. On 24 March 1994, the Saeima of the Republic of Latvia adopted The Law On Budget and Financial Management, which determines the procedure for budget implementation and the role of the Treasury in the process of budget implementation. Thereby Treasury opens accounts for central government budget execution and manages liquidity according to the single account method by collecting budgetary revenues, receiving financial recources from borrowing activities, loan repayments of budgetary recources and other incoming payments as well as ensuring outgoing cash flow of budgetary expenditure, assigning budgetary loans, repaying government debt and ensuring other outgoing payments. Therfore Treasury organizes the execution of government budget and management of financial resouces  according to the single account method that is recognized as the best practice in global financial markets for financial management. The approach allows to reduce direct and indirect costs of borrowing and cash management, provides the opprotunity to receive additional income from effective employment of resources and investments, ensures control of every transaction and facilitates accounting of all the transactions.

The Cash Management Strategy apprroved by Ministry of Finances sets the goals, basic principles, tasks and liability for the Treasury in order to ensure safe and efficient cash management, complying with requirements for liquidity management and eliminating financial risks.

The main instruments used for cash management are deposits with commercial banks and investments in fixed income debt securities according to Cash Management Strategy that states certain investment parameters and cooperation limitations for each particular counterparty depending on the financial instrument.