Russia wants to see what happens to Fannie, Freddie

By Darya Korsunskaya and Toni Vorobyova;

MOSCOW (Reuters) - Russia sees Washington's move to take control of troubled U.S. mortgage agencies as positive, but wants to see them emerge from crisis before buying any more of their debt, Finance Minister Alexei Kudrin said on Tuesday.

The U.S. government has committed up to $200 billion to support Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz), Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), which together back about half the United States' $12 trillion in mortgages and whose debt holders include major countries. ID:nN07463067

"I judge this decision as positive. When countries like Russia, China or Japan put their reserves into this (agency) debt, we were always assuming such U.S. government actions in the case of a crisis situation," Kudrin said at an interview at the Reuters Russia Investment Summit.

"Today we have seen that our views and the views of other countries on this are the same as those of U.S. authorities," he said at the event, being held at the Reuters office in Moscow.

Russia has cut its holdings of Fannie Mae, Freddie Mac and Federal Home Loan Banks from $100 billion at the start of the year -- or over one-sixth of its reserves -- to less than $60 billion by not replacing some of the debt as it matured.

Kudrin said the U.S. rescue of the companies was not yet a reason to start increasing the holdings again.

"We want to see that these companies emerge from the crisis. To buy the debt of a company that is in the middle of a crisis is another matter," he said.

"But at least we are not trying to sell these papers. The papers that we now hold are short-term, they suit us within the framework of the time for which we have invested."

RISKS EXIST

On January 1, around 84 percent of the $100 billion that Russia held in U.S. agency debt was due to mature in less than a year.

"We want to have a bigger understanding about the long-term future of these companies. Risks, of course, exist," Kudrin said.

"I have heard comments from Western economists and politicians that of course it is necessary to diversify the risks, to separate these companies into smaller ones."

Alexei Ulyukayev, first deputy chairman of Russia's central bank -- which manages the reserves -- told Reuters on Monday that money no longer invested in U.S. agencies could be put in Treasuries or could be taken out of dollars altogether.

For example, Russia has increased the share of the yen and the Swiss franc in its reserves. ID: nL8168464

But despite increased tensions with United States over Russia's military conflict with Georgia, Kudrin said there was no question of Russia ditching U.S. assets altogether.  Continued...