Central Bank of the Russian Federation and its functions

The main financial institution of the country isCentral 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 Committee of the USSR.

What is an institution and who owns it?

The Central Bank does not affect activitiesindividuals. 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.
• Establish settlement rules and monitor their implementation.
• Development and development of the concept of monetary policy.
• Development and implementation of settlements with non-residents.
• Control over 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 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 agreed 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 branches.

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

One of the main tasks of the main financialThe 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 keepconstant 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 indicatorfor 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 it is 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 indicatorgenerally 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,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 intwenty 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 after a week he dropped 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 performed by the Central Bank of the Russian Federation is the issue of money - the release of cash into circulation, which increases their total weight.

The tasks of the main institution in this fieldare control over the amount of money in circulation, the exchange of useless (old) banknotes, as well as the timely change of design of the notes to effectively counterfeit coins.

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

The 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 representsa 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 the name metallized with paint, relief elements, shades of color, changeable depending on the viewing angle.

The minimum nominal value of a coin issued by the Central Bank of the Russian Federation is one kopek. Maximum - ten rubles.

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

Issue of non-cash money

This form of emission is the basis of non-cashaccounts. The pursued goal is to meet the necessary needs of market participants in working capital. Often, an organization’s capital is not enough to perform a specific function. Under certain circumstances, additional money may be issued to complete a financial task. The process operates on the basis of a bank (deposit) multiplier.

This is a unique method becausee-money, along with the Central Bank, can carry out banking institutions and even credit organizations. Of course, under the strict control of the supervisory authority.

Abuse the process is extremely difficult, because such an issue is made solely for the purpose of lending to a market economy.

Bank of banks

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

The first is the issuance of licenses. And then - constant control over the activities of the entity, its liquidity. In case of need, rehabilitation is practiced by introducing a curator. Deprivation of the right to conduct foreign exchange activities or the complete revocation of a banking license is carried out in case of impossibility to work in the financial market.

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

Conclusion

The activities of the Central Bank of RussiaFederation 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.