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On Investment Management of Reserve Fund and National Wealth Fund’s Assets

Russia’s Finance Ministry hereby reports on investment management of the Reserve Fund and the National Wealth Fund’s assets over the period from January 1 to December 31, 2016.

In 2016, the commencement/termination date of the interest periods upon the expiration whereof the Bank of Russia pays interest on the sovereign funds’ assets placed in foreign currency accounts was transferred from January 15 to December 15. Consequently, the return on the Funds’ assets placed in the said accounts in 2016 was credited to the budget twice, in January and December rather than in January only as in previous years.

Reserve Fund

In December 2016, the Federal Budget received RUB10.51bn worth of the return on the Reserve Fund’s assets placed in foreign currency accounts with the Bank of Russia for the period from January 15 to December 15, 2016.

In compliance with Federal Law No.359-FZ dd. 14 December 2015 On the Federal Budget 2016 and the Russian Ministry of Finance’s Order No.532 dd. 30 November 2016 On the Use of Reserve Fund’s Assets in Currency of the Russian Federation to Cover the Federal Budget Deficit in 2016, a portion of the Reserve Fund’s foreign currency assets held in the accounts with the Bank of Russia (USD 6.87bn, EUR 6.44bn and GBP 1.21bn) was sold in December 2016 to buy RUB 966.90bn, and the proceeds were credited to the single account of the federal budget.

As at 1 January 2017, the Reserve Fund’s assets totaled RUB 972.13bn, or USD 16.03bn in equivalent. The balances of the Reserve Fund separate accounts comprised:

  • USD 7.62bn;
  • EUR 6.71bn;
  • GBP 1.10bn.

For the period from 15 to 31 December 2016, the total estimated return on the Reserve Fund’s assets placed in foreign currency accounts with the Bank of Russia as denominated in US dollars came to USD 0.02bn, or RUB 1.15bn in equivalent. The exchange rate difference from the revaluation of balances of the said accounts for the period from January 1 to December 31, 2016 was a negative value of RUB (-)531.54bn.

National Wealth Fund

In December 2016, the federal budget was credited with RUB 8.76bn worth of the return on the Reserve Fund’s assets placed in foreign currency accounts with the Bank of Russia for the period from January 15 to December 15, 2016.

In December 2016, Vnesheconombank prepaid RUB 15.98bn worth of the Fund’s assets placed in deposits to extend subordinated loans to PAO AKB Sviaz-Bank in compliance with Federal Law No.173-FZ dd. 13 October 2008 On Additional Measures to Support the Financial System of the Russian Federation due to the early repayment of the said loans in the respective amount by PAO AKB Sviaz-Bank.

In compliance with the Russian Government’s Resolution No.18 dd. 19 January 2008 On Procedure for Managing the Assets of National Wealth Fund and in order to enhance Vnesheconombank’s balance sheet structure, the same amount of the Fund’s prepaid assets was placed in a new deposit with Vnesheconombank with interest paid quarterly at 7.19% p.a. with a maturity in December 2020.

In December 2016, in compliance with the Russian Government’s Resolution No.18 dd. 19 January 2008On Procedure for Managing the Assets of National Wealth Fund, the Fund’s assets were placed in deposits with Vnesheconombank with interest paid annually at 6% p.a. to finance the following projects of Vnesheconombank:

  • Purchase and Leasing of 664 Carriages for Moscow Metro, in the amount of RUB 3.20bn with a maturity in December 2030;
  • Modernisation of Metro Carriages in Budapest, Hungary, in the amount of RUB 4.36mn to be repaid in December 2019.

1). As at 1 January 2017, the NWF assets totaled RUB 4,359.16bn, or USD 71.87bn in equivalent, including:

  • USD 19.51bn;
  • EUR 20.76bn;
  • GBP 3.83bn.

held in the NWF separate accounts with the Bank of Russia;

2) RUB 198.23bn and USD 6.25bn deposited with Vnesheconombank;

3) USD 3.00bn invested in debt securities of foreign states based on an ad hoc decision by the Russian Government and subject to no long-term credit rating requirements.

4) RUB 112.63bn and USD 4.11bn invested in debt securities issued by Russian legal entities to deliver sustainable infrastructure projects included in the list approved by the Russian Government;

5) RUB 278.99bn invested in preferred shares in credit institutions;

6) RUB 164.43bn deposited with VTB Bank and Gazprombank to finance sustainable infrastructure projects included in the list approved by the Russian Government.

For the period from 15 to 31 December 2016, the total estimated return on the NWF assets placed in foreign currency accounts with the Bank of Russia as denominated in US dollars came to USD 0.05bn, or RUB 3.22bn in equivalent. The exchange rate difference from revaluation of the Fund’s assets for the period from January 1 to December 31, 2016 was a negative value of RUB (-)861.26bn, including:

  • RUB (-)697.84bn of the balances in foreign currency accounts with the Bank of Russia;
  • RUB (-)76.46bn of the USD deposits with Vnesheconombank;
  • RUB (-)36.68bn invested in debt securities of foreign states based on an ad hoc decision by the Russian Government and subject to no long-term credit rating requirements.
  • RUB (-)50.29bn invested in foreign currency-denominated debt securities issued by Russian entities to deliver sustainable infrastructure projects included in the list approved by the Russian Government.

In December 2016, the federal budget received the return on investment of the NWF assets:

a) RUB 2.91bn, or USD 0.05bn in equivalent, in debt securities issued by Russian legal entities to deliver sustainable infrastructure projects included in the list approved by the Russian Government;

b) RUB 1.84bn, or USD 0.03bn in equivalent, in deposits with Vnesheconombank;

From January to December 2016, the total return on investment of the NWF assets in eligible financial assets minus the assets in the accounts with the Bank of Russia amounted to RUB 39.52bn, or USD 0.60bn in equivalent.


Figures for the amount of the Reserve Fund and the National Wealth Fund, as well as the estimated return on investment of the Funds’ assets are calculated at the official foreign exchange rates fixed by the Bank of Russia as of the date preceding the reporting one, and at the cross rates calculated based thereon.

Detailed statistics on transactions in the assets of the Reserve Fund and the National Wealth Fund are posted on the Russian Finance Ministry website in the Reserve Fund and National Wealth Fund subsections in Russian and English and are regularly updated.


Source: Press Office of Russia’s Ministry of Finance