VEB cleared to invest in non-sovereign bonds by November

By Ivan Anderzhanov in Moscow

Russia’s state development bank Vnesheconombank (VEB) will be allowed to purchase non-government bonds by November, according to new rules expected to be approved by the government shortly.

The new rules will enable VEB to increase its portfolio allocation of non-sovereign bonds to 40%. The credit rating of the bonds, other than government, should not be lower than one notch below the sovereign rating.

The government hopes that giving the national pension fund a wider mandate could help boost returns.

However, analysts said the decision to expand its investment universe could undermine potential demand for government bonds.

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