Treasury Cash Management With Strategic Thinking And Operating Arrangements

In recent years, cash reserves of the state treasury deposited within the Central Bank have been kept at a very high level. Such a high level of cash treasury, apparently, shows that a huge amount of capital has been retained in bank and left unused, thus leading to loss of efficiency. It also creates obstacles to Central Bank's efforts in adjusting the monetary base and implementing its monetary policy. Along with the establishment of public finance framework and deepening in reforms relating to treasury management system, we are seeking to promote treasury cash management through the perspective of efficiency enhancement in treasury management. This article aims to analyse the present situation of traditional treasury management system in our country and then analyse the necessity of improved management in cash treasury, and finally, propose that it is an inevitable choice to carry forward timely cash management in the process of deepening reforms in treasury management. Treasury cash management is a powerful enforcement approach in financial policy, and it can provide clear guiding signal to the financial market.However lots of keynote issues still need to be tackled in the employment of treasury cash management under present conditions in China. The main points in this article are as follows:To promote treasury cash management, a must is the proper handling of the relations between the Treasury Ministry and the Central Bank. A risk prevention mechanism should be effectively established. Coordination should be established and duty should be clearly allocated between these two sectors.There exist various risks in treasury cash management. An effective risk prevention mechanism should be established.An optimum cash reserve line should be accurately predicted for the treasury management operation.In this article, the author offers a clear picture of the role-play for the Treasury Ministry and the Central Bank in the practice of treasury cash management. The author also gives out the preventative measure for risks incurred in treasury cash management and provides three models for predicting the optimum cash reserve in treasury management.