Банкеръ Weekly



The Minister of Finance Milen Velchev and his deputy Krassimir Katev have required the Bulgarian National Bank (BNB) to offer schemes for more lucrative investing of the Government's money, which is part of the fiscal reserve. In addition, the reserve includes the deposits of the National Health Insurance Fund, of the National Insurance Institute, and of other budget organisations, such as the Air Traffic Control Service and the Tobacco Fund. The aggregate amount of the fiscal reserve presently exceeds EUR1.1BN, and the Government's account at the BNB is more than EUR520MN. Over EUR310MN of the Government's money has been invested in 7-day deposits with an annual yield of 0.6554%, and the balance of EUR210MN is on 6-month deposits, bearing an annual interest of 4.5 per cent.
If the Finance Ministry appraises that there will be a permanent balance of some EUR200MN in the Government's accounts at the central bank, the amount could be placed on a 1-year deposit, which will be bearing a 5% or 5.5% interest. And the other funds in the fiscal reserve could be invested in 1-month of 3-month deposits, which would bring almost twice higher yields. However, this enticing prospect could turn out quite delusive if the revenues, expected by the Cabinet of Premier Simeon Saxe-Coburg-Gotha, do not come within the projected term. In such a case, due foreign debt payments would be delayed, and eventually lead to an undesirable bad turn in Bulgaria's relations with its foreign creditors.

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