Russia C.Bank says loses on US home finance firms

MOSCOW, Feb 28 (Reuters) - Russia's central bank is suffering certain losses as a holder of securities in U.S. home finance firms, the bank said on Thursday in a rare comment about its investments, without saying if it would dump the papers.

"... We have our investment portfolio and we have papers of Fannie Mae (FNM.N) and Freddie Mac (FRE.N)... Because we have those papers in our portfolio, the drop in quotes is affecting us and we post losses," said Alexei Ulyukayev, first deputy head of the central bank.

Answering a question on the size of the investment, he told journalists: "I can't say it is insignificant". He declined further comments.

Ulyukayev also declined to say if the bank could switch to other investments, nor did he say if he was referring to the yield or prices when he spoke about "quotes".

A sharper-than-expected drop in U.S. home prices that first sparked a crisis in subprime lending last summer has since tainted all types of mortgages.

Fannie Mae and Freddie Mac, the largest and second largest U.S. providers of residential mortgage funding, reported heavy losses and saw their stocks falling sharply.

Russia's central bank, which manages the world's third largest gold and forex reserves of over $480 billion, has been investing in quasi-sovereign paper for many years. It does not invest in stocks.

Under the existing structure some 80 percent of funds can be invested in sovereign papers, 15 percent in securities of state agencies and another five percent in securities of international financial organisations.

Apart from Fannie Mae and Freddie Mac, the central bank can also invest in securities of U.S. Federal Home Loan Banks and Federal Farm Credit Banks and quasi-sovereign bonds from Britain, France, Germany, Spain, Austria, Canada and the Netherlands.

The bank says it is a long-term investor and no portfolio adjustment would ever lead to sharp market moves, be it U.S. Treasury bonds or quasi-sovereign papers, as such a policy would only hit the bank's interests. (Reporting by Yelena Fabrichnaya, writing by Dmitry Zhdannikov; editing by)