Wednesday June 10, 07:51 PM
Russia to cut its US treasury holdings: central bank
MOSCOW (AFP) - Russia announced plans Wednesday to cut the US Treasury bond holdings in its 400-billion-dollar sovereign wealth fund, the central bank's first deputy chairman, Alexei Ulyukayev, said.
"We plan to reduce the portion of US Treasuries since the window of opportunity has arisen to work with other (financial) instruments," he was quoted by Russian news agencies as saying.
Ulyukayev said Russia would shift its reserves into International Monetary Fund (IMF) bonds and commercial bank deposits.
He added, however, that the move would be gradual and Russia would sell off its Treasuries as they reached maturity.
US Treasury bonds now make up 30 percent of Russia's 400-billion-dollar reserves after the central bank reduced its holdings of high-risk assets, such as US mortgage-backed securities, Ulyukayev said.
Russia last month pledged to buy 10 billion dollars' worth of the IMF's first-ever bond offers, backing the institution's mission to provide financing to countries floundering amid the global economic crisis.
Ulyukayev estimated these bond purchases would take place in the fourth quarter of 2009.
The central bank's announcement came ahead of a planned meeting of leaders of four key emerging economies in Moscow on June 16, where the dollar's role as the world's global reserve currency will be discussed.
Russia has been aiming to challenge the dollar and raise the status of this group of emerging economies, dubbed the BRIC states -- Brazil, Russia, Indian and China.
Ulyukayev also said Russia was ready to diversify its large reserves -- accumulated over months of record-high oil prices as the world's second-largest exporter -- to include China's yuan if it became a new global reserve currency.
"The more we diversify our portfolio, the better," he said.
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