free U.S. Treasuries narrowed by 7 basis points on Friday to 177 basis points, according to JP Morgan's EMBI+ indices. The debt deal marks a triumph for Kudrin, who last year set up a budget stabilisation fund to gather windfall oil revenues which is now brimming with $30 billion -- meaning Russia can easily pay cash for the debt buyback. "Russia has this windfall of oil money and given that the economy is overheating it is much better to use it for foreign debt payment than to spend it domestically," said Alexei Moisseev, economist at Renaissance Capital in Moscow. Germany's Deputy Finance Minister Caio Koch-Weser said the debt pact would help ease budget pressures in Europe's largest economy, as well as cement Russia's role in the Group of Eight industrial nations. --More 2131 Local Time 1831 GMT
