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Reserve Fund Can Go to Foreign Banks
The Russian government approved the rules for the management of the Reserve Fund on January 9. The Reserve Fund will be created out of the stabilization fund on February 1. Under the new rules, funds received by Russia from oil selling at high prices on the world market can be deposited in foreign banks ad credit organizations, as well as being placed in foreign currency and securities. Foreign deposits are not to exceed 30 percent of the Fund's total.
In addition, the list of countries in which the Reserve Fund money can be placed is different from that for the stabilization fund. Now funds can be invested in securities in Canada, Denmark and Sweden, but not Greece, Italy or Portugal. The full list of countries where investment is allowed is as follows: Austria, Belgium, Canada, Denmark, Finland, France, Germany, Great Britain, Ireland, Luxembourg, The Netherlands, Spain, Sweden and the United States.
The funds can also be kept in U.S. dollars, euro or pounds sterling. The Central Bank also uses Japanese yen in its international reserves. Besides the Reserve Fund, the stabilization fund will also become the source of the National Prosperity Fund. The Reserve Fund can be used to cover deficits in the federal budget should oil prices fall and the National Prosperity Fund will be used to pay pensions. The Reserve Fund will consist of about 3 trillion rubles on February 1.
www.kommersant.com
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