Central Bank of the Russian Federation and its functions

The main financial institution of the country is the Central Bank of the Russian Federation, Moscow. This is a special organization, the main purpose of which is the regulation of financial and credit systems. The Central Bank of the Russian Federation (Moscow, Neglinnaya Str. 12) is the link between the executive branch and all sectors of the economy.

This institution was established on the thirteenth of July 1990. It is the successor to the State Security Bureau of the USSR.

What is an institution and who owns it?

The central bank does not affect the activities of individuals. The main counterparties are all banks of the country, regardless of the form of ownership. It is a legal entity, has its own capital and Charter. But at the same time it is completely in Federal ownership. In other words, it belongs to the state.

Performed functions

The Central Bank of the Russian Federation is an organization whose responsibilities include more than twenty analytical and practical functions:

• Monopolistic issue (issue) of cash.
• Establishment of payment rules and control over their implementation.
• Development and development of the concept of monetary policy.
• Development and implementation of settlements with non-residents.
• Controlling the conduct of banking operations.
  
• Execution of payments of deposits to individuals in the event of bankruptcy of financial institutions that did not consist in the mandatory deposit guarantee system.
• Servicing of budgets of all levels. In some cases, extra-budgetary funds.
• Registration of credit organizations and partnerships, issuance, as well as suspension and revocation of licenses, control of activities.
• Registration and control of non-state pension funds.
• Storage of cash reserves of commercial banks.
• Issue and registration of securities. Reporting on the outcome of the issue.
• Counteracting the dissemination of insider information (obtained by criminal means) and manipulating the market.
• Crediting of organizations and their refinancing.
• Management and control over payment systems.
• All banking operations necessary for the normal functioning of the institution.
• Administration of gold and foreign exchange reserves.
• Regulation and control of foreign exchange activities.
  
• Operations to receive and service the public debt, including obtaining a loan to cover the budget deficit.
• The procedure of sanation (rehabilitation) of troubled banks.
• Setting exchange rates for the relevant banking day.
• Transactions and transactions coordinated with the International Monetary Fund.
• Forecast and development of the balance of payments.
• Functions of banking supervision of credit and non-credit financial organizations, as well as banking groups, joint-stock companies and the corporate sector.
• Statistics of foreign investments.
• Analysis and forecast of the state of the economy.

Regional structure

The Central Bank of the Russian Federation has representative offices in each of the nine federal districts. In addition, there is an extensive network of branches in almost every major city.

The most important federal offices are the Southern Main Office of the Central Bank of the Russian Federation, as well as the North-West and the Urals.

What is the refinancing rate of the Central Bank of the Russian Federation?

One of the main tasks of the main financial institution is lending to the banking system. The refinancing rate of the Central Bank of the Russian Federation is the interest rate in the calculation of one calendar year, which is subject to reimbursement by credit institutions for the loan. This value is subject to constant adjustment depending on the situation on the money market of the country, as well as on inflation and gross domestic product. This is the main instrument of macroeconomic regulation in the state.

Tasks of central banks on inflation

The task of the Central Bank of the country is to keep a constant balance with the help of this indicator. Too high value will undoubtedly stop the price spike, but at the same time slow down the financial growth. And, conversely, too low indicators will help saturate the economy with a lot of cheap money, but at the same time inflation becomes dangerously uncontrollable, which will subsequently inevitably lead to a change in the strategic planning model.

At the same time, the discount rate is an indicator for investors. Data can both attract and alienate a potentially interested company. It's one thing when you can always rely on the help of the country's banking system. And quite another - when for investments it is necessary to use only own means. Risks grow accordingly.

The size of discount rates in the world

To date, the refinancing rate, set by the Central Bank of the Russian Federation, is eleven percent per annum.

This is by no means the lowest figure in the world. So, the size of the discount rate to two percent is fixed by financial institutions of Denmark, Norway, New Zealand, Australia, Canada, Japan, Great Britain, Eurozone and the USA.

In the banks of Switzerland and Sweden, the key indicator is generally negative. These innovations are associated with virtually zero inflation in countries. The volume of exports for a long time was catastrophically decreasing, which created a serious risk of cheaper national currencies - the Swiss franc and the Swedish krona. Also, this often led to a decrease in the interests of potential investors.

The negative discount rate implies that the country's institutions pay the Central Bank for the services of storage of funds in its depositories. Developed countries are seriously considering the introduction of this innovation and for the contributions of individuals.

The size of the CBR's discount rate for the period of activity

The size of the refinancing rate of the Central Bank of the Russian Federation has seriously fluctuated depending on the processes taking place in the country.

Since the formation of the new state, this indicator has changed significantly, sometimes several times a week.

Up to 2003, it exceeded the value of twenty percent. The refinancing rate of the Central Bank of the Russian Federation in different periods reached up to two hundred and ten percent (in 1994, the value lasted until the end of April next year). In general, from June 1993 to July 1996, the value exceeded one hundred percent per annum. The concerted efforts of the government and bankers allowed to gradually calm down the financial storm. And in June 1997 the value reached quite acceptable twenty one percent. But the crisis broke out, and the default that followed after these events repeatedly repeatedly pushed the value down to one hundred and fifty percent. This indicator was recorded on May 27, 1998. But in a week he fell to sixty.

Since January 2004 and to this day the main indicator of the country did not exceed fifteen percent.

On June 1, 2010, a record was registered that was set by the Central Bank of the Russian Federation - the rate was only seven point seventy five percent.

Issue of money

One of the most important functions that the Central Bank of the Russian Federation implements is the issue of money - the release of cash into circulation, which increases their total weight.

The tasks of the main institution in this sphere are control over the amount of money in circulation, the exchange of useless (worn) banknotes, as well as the timely change in design of the notes to effectively counter the counterfeiters.

This function of the Central Bank is difficult to overestimate, because the ruble is the only possible means of payment in the country.

Issue of money is carried out in cash and non-cash form.

The Russian currency is not backed by valuable metals, and also has no other equivalence ratios.

Issue of cash ruble

Cash paper money is a denomination of five to five thousand rubles. They possess all the necessary modern protective equipment - watermarks, protective thread, patterns of fine lines, microtext, fibers luminous in ultraviolet radiation, denomination of metallized paint, relief elements, shades of color, changeable depending on the viewing angle.

The minimum denomination of a coin issued by the Central Bank of the Russian Federation is one kopeck. The maximum is ten rubles.

They are minted in the Moscow and St. Petersburg mints of such metals and alloys as nickel, steel, copper, zinc, nickel, and brass.

Issue of non-cash money

This form of issue is the basis of non-cash accounts. The pursued goal is to satisfy the necessary needs of market participants in working capital. Often the organization's capital is not enough to perform a specific function. In some circumstances, additional money may be issued to fulfill the financial task. The process operates on the basis of a bank (deposit) multiplier.

This is a unique method, as the emission of electronic money, along with the Central Bank, can hold banking institutions and even credit organizations. Of course, under the strict supervision of the supervisory authority.

It is extremely difficult to abuse the process, because such emissions are made solely for the purpose of lending to the market economy.

Bank of Banks

The Central Bank of the Russian Federation performs supervisory function over the entire banking system.

First of all, this is issuing licenses. And subsequently - constant control over the activities of the business entity, its liquidity. If necessary, rehabilitation is practiced through the introduction of a curator. Deprivation of the right to conduct foreign exchange activities or the complete cancellation of a banking license is carried out if it is impossible to work in the financial market.

The central bank creates a favorable environment for the functioning of credit institutions, regulates cash flows and lends.

Conclusion

The activity of the Central Bank of the Russian Federation is an important component of the domestic economy. It is designed to preserve the financial stability of the country, using a wide range of opportunities for this.