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. Last Updated: 07/27/2016

Oil Fund May Widen Investments

The country's new oil fund, to be created next year, may invest in a broader range of instruments, compared with the $127 billion oil fund the government already operates, a Finance Ministry official said Wednesday.

The government plans to split its so-called stabilization fund into two different funds from Feb. 1 to better manage the nation's oil revenue. The government is currently drafting legislation on the new Reserve Fund and the National Welfare Fund.

The new Reserve Fund will have approximately the same investment structure as the stabilization fund, 45 percent of which is kept in dollars, 45 percent in euros and the remaining 10 percent in British pounds, the Finance Ministry official said during a briefing in Moscow.

The Reserve Fund may eventually broaden its investments to include securities issued by state agencies and international financial organizations with no lower than an A credit rating, pending the Cabinet's approval, the official said.

The government is "closely following" the discussion on curbing investments by sovereign wealth funds in foreign assets, he said. "We are not indifferent to what legislative climate the investments will be made," the official said.

Russia's sovereign funds are "unlikely to follow the Arab model where resources are channeled toward buying controlling stakes in companies," he said. These funds will act like portfolio investors, he said.