11 Jan 2010 20:01

Finance Ministry deposits $2 bln in Welfare Fund assets with VEB

MOSCOW. Jan 11 (Interfax) - The Russian Finance Ministry deposited $2 billion in National Welfare Fund assets with Vnesheconombank (VEB) in December in order to increase return on and diversify the investment of the Fund's assets, the ministry said in a statement.

The deposit must be returned by July 1, 2011. Interest will be payable on the deposit every six months at a floating rate at LIBOR + 2.75%.

"This is a new instrument for us - a floating rate instrument that we haven't used before. LIBOR is at a record low and we expect to make some good gains [if it rises]," Pyotr Kazakevich, deputy director of the ministry's debt department, told Interfax.

VEB will decide itself where to invest the funds, he said.