Fiscal Policy, Public Debt Management and Government Bond Markets : Issues for Central Banks

This paper covers fiscal policy tools that promote sustainability and their influence on monetary policy in Russia, the Bank of Russia's role in public debt management and main features of the domestic currency public debt market. At present Russia's budgetary circumstances are quite favourable, however, the budgetary system remains exposed to the world financial markets conditions and, above all, to oil prices. To reduce the budget's dependence on oil and gas revenues and accumulate reserves in the event that oil prices retreat a special mechanism for the utilisation of oil and gas revenues within the federal budget has been envisaged. Operations to finance the budget deficit affect the Bank of Russia's monetary policy, however, this effect is not significant. The Bank of Russia's role in public debt management is focused on consulting the Ministry of Finance on government securities' issuance and repayment schedules given the impact on banking system and monetary policy priorities. The main funding source of the federal budget deficit is the government securities' market which has shown swift growth over the last decade. The reforms conducted by the Ministry of Finance and the Bank of Russia including the improvement of financial market infrastructure would promote further market development.Full publication: "http://ssrn.com/abstract=2205164" Fiscal policy, public debt and monetary policy in emerging market economies