Q:
A:
Possibility of issuing treasury bills for covering budget deficit
Belgrade,
24 June 2008
Serbian Minister of Finance Mirko Cvetkovic said today that the state is examining the possibility of issuing treasury bills in order to cover a possible budget deficit.
Author:
Fonet
Speaking at a conference "Future of the capital market in the Balkans", Cvetkovic explained that treasury bills would be in RSD and issued with a maturity period of 12 months. Interest on those securities would not be fixed, but variable.
Treasury bills would be available to buy not only by the banks, but by local and foreign private individuals as well.
The issue of these treasury bills would cover a budget deficit that is expected in autumn because the planned privatisation income is not as forecasted, the minister explained.
Speaking about the state of the budget, Cvetkovic said that in the first five months of the year the budgetary revenues have reached RSD 253 billion, and expenditures RSD 254 billion.
He also recalled that capital gains tax from securities has been reduced from 20% to 10% per transaction and added that amendments to the law are underway which would enable a single payment of the capital gains tax for the entire year and not after each transaction.
When asked whether there will be enough money in the budget to subsidise housing loans, the Minister said that around RSD 3.5 billion has been planned for this year for these purposes and added that the funds are spent for each trimester individually.
In the second trimester there was an increased demand for state-subsidised housing loans and the funds were primarily used to subsidise housing loans for the Serbian Army and health sector employees, he explained.
When asked whether another bank with majority state ownership will be recapitalised, Cvetkovic stressed that recapitalisations of Komercijalna Banka and Postanska Stedionica were all that was planned for 2008 in this respect and added that every recapitalisation is an expense for the state because it affects the increase of the budget deficit.
Treasury bills would be available to buy not only by the banks, but by local and foreign private individuals as well.
The issue of these treasury bills would cover a budget deficit that is expected in autumn because the planned privatisation income is not as forecasted, the minister explained.
Speaking about the state of the budget, Cvetkovic said that in the first five months of the year the budgetary revenues have reached RSD 253 billion, and expenditures RSD 254 billion.
He also recalled that capital gains tax from securities has been reduced from 20% to 10% per transaction and added that amendments to the law are underway which would enable a single payment of the capital gains tax for the entire year and not after each transaction.
When asked whether there will be enough money in the budget to subsidise housing loans, the Minister said that around RSD 3.5 billion has been planned for this year for these purposes and added that the funds are spent for each trimester individually.
In the second trimester there was an increased demand for state-subsidised housing loans and the funds were primarily used to subsidise housing loans for the Serbian Army and health sector employees, he explained.
When asked whether another bank with majority state ownership will be recapitalised, Cvetkovic stressed that recapitalisations of Komercijalna Banka and Postanska Stedionica were all that was planned for 2008 in this respect and added that every recapitalisation is an expense for the state because it affects the increase of the budget deficit.
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