Centeno diverts millions from Bank of Portugal
A safety net of cash and deposits in Portugal’s central bank have been diverted to the Ministry of Finance by Finance Minister Mário Centeno in a bid to modernise the public payments network system.
The safety net has grown in recent years, but despite this, under the proposed State Budget for 2020 Centeno is prearing to funnel this cash to other accounts under the more direct control of the State and Ministry of Finance.
This safety net was created to deal with financial shocks, pay suppliers faster and make savings in the more expensive transactions. It means that gradually and consistently less money is being held in the Bank of Portugal.
According to Dinheiro Vivo the BdP had 8,777 million euros deposited to November 2019, an amount that represents a 5% fall on the amount available at the end of 2018 (9,226 million euros).
The discrepancy is even greater when compared to the end of 2017 since of the 11,845 million euros deposited at the end of 2016, there was just 8,953 million euros by the end of the following year. In other words a fall of over 24%.
However, the Ministry of Finances states that there was a 50% increase in the value of financial applications in banks to 750 million euros. Furthermore, one of the accounts at the Treasury & Public Debt Management Agency (IGCP) now has 237 million euros, an increase of around 48%. At the same time, the customs and financial services of the State have 308 million euros, an increase of over 3000% on the same period last year.
The transfers have been made with the idea of modernising the payments network of public institutions, better controlling liquidity risks and accelerating payments and savings systems. According to the State Budget 2020, one of the goals from this measure is to “minimise the State’s need to finance itself through the international financial markets, through increasing the value of third party funds available in the State treasury applied to public debt instruments.”