Russia made profit on U.S. mortgage bonds - Kremlin aide

MOSCOW, September 25 (RIA Novosti) - Russia's Central Bank made a profit from investing a part of the country's international reserves in U.S. mortgage bonds, despite the subprime mortgage crisis, the president's economic adviser said on Thursday.

"The Central Bank has not sustained any losses. In fact, if you look at the price of mortgage bonds issued by Fannie Mae and Freddie Mac, their value has risen," Arkady Dvorkovich said.

Finance Minister Alexei Kudrin earlier said bonds held by the Central Bank in the two U.S. mortgage giants yielded over $1 billion in the first half of 2008.

The U.S. government-sponsored firms, which together own or guarantee $5 trillion in U.S. mortgage debt, or almost 50% of the market, were taken over by a federal regulator early in September to prevent their possible collapse amid a growing credit crunch.

Russia's Central Bank earlier said it held around $100 billion worth of bonds in Fannie Mae, Freddie Mac, and another mortgage firm, FHLB, which are guaranteed by the U.S. government, but has cut the figure by more than half since the firms' troubles became public.

Dvorkovich said the Central Bank's investment in U.S. mortgage bonds has dropped from $100 billion to $30 billion, and that the bank is now focusing on investment in euro-denominated government and quasi-government assets.