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Russian gov't to decide on Stabilization Fund in Feb.

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Russia's government could determine the future of the oil revenue fund in February, the finance minister said Monday.
MOSCOW, February 5 (RIA Novosti) - Russia's government could determine the future of the oil revenue fund in February, the finance minister said Monday.

The ministry earlier submitted for the Cabinet's consideration proposals on the Stabilization Fund, which was set up in 2004 to accrue windfall profits from high world oil prices.

One of the proposals is to expand the list of securities in which to invest the assets of the Stabilization Fund, which has hit $100 billion. The ministry is also considering whether to widen the range of currencies the assets are converted into.

"In February, we should decide on the proposals made by the Finance Ministry and other departments on the future of the Stabilization Fund, the creation of the 'fund for the future' and proposals related to oil revenues," Alexei Kudrin said.

"The fund for future generations" would use up to 10% of the Stabilization Fund. The money has been earmarked for education, healthcare and social security programs.

Kudrin said the issues were important and would determine the mid-term investment program.

Stabilization Fund resources were initially intended to be invested in the highly liquid debt securities of foreign states, but instead are now being converted into foreign currency and placed in Federal Treasury forex accounts with the Central Bank.

According to the Finance Ministry's investment formula, U.S. dollars account for 45% of the Stabilization Fund's foreign currency, euros make up 45%, and 10% is in British pounds.

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