France Keeps Top Spot in Russian Reserves as U.S. Share Rises

France remained the top destination for the Russian central bank’s investments ahead of the U.S., whose share increased.

The amount of foreign-currency reserves in French assets, including government bonds and deposits, slipped to 31.8 percent as of Sept. 30 from 32 percent three months earlier, the central bank said in a quarterly report on its website on Friday. It increased investments in the U.S. to 31.1 percent from 29.7 percent. The portion of German assets declined to 16.5 percent, while U.K. and Japanese holdings were unchanged.

The euro passed the U.S. currency’s share in Russia’s reserves last year for the first time since 2008 after the central bank shifted some dollar holdings into non-reserve assets as a result of repurchase auctions. The Bank of Russia this week suspended foreign-currency purchases to build up reserves after they were decimated during last year’s ruble collapse and a slump in oil prices.

Trade with Europe has suffered amid the standoff over Ukraine, with the U.S. and the European Union imposing sanctions to force President Vladimir Putin to withdraw his support from pro-Russian separatists in Ukraine. The Kremlin has retaliated with curbs on food imports. Putin signed a decree two days ago ordering the destruction of all sanctioned food products that enter Russia, excluding those carried by individuals for personal consumption or shipped to other countries.

France, Russia’s 11th-largest trading partner in 2014, accounted for 2.1 percent of the nation’s trade volume in May, according to Federal Customs Service data compiled by Bloomberg. French Prime Minister Manuel Valls said on Friday that his government will finalize a decision on compensating Russia for the non-delivery of two Mistral warships by the end of the summer.

Russia expects France to return almost 1.2 billion euros ($1.3 billion) for the helicopter carriers, Russia’s Kommersant newspaper reported. The two countries have completed talks on canceling their delivery and will end the contract in the near future, Kremlin aide Vladimir Kozhin told Russia’s state-run RIA Novosti reported on Thursday.

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