National Bank of Azerbaijan Increases Investment Part of Currency Reserves

Business Materials 12 September 2008 13:22 (UTC +04:00)

Azerbaijan, Baku, 12 September/ Trend , I. Khalilova/ National Bank of Azerbaijan (NBA) has balanced currency composition of portfolio and today 60% of currency reserves are kept in dollars and remaining 40% in euros and pound sterling, Elman Rustamov, chairman of NBA Board of Directors said.

"Our portfolio is divided into two parts- investments and operational part. The larger part is focused on American currency," Rustamov added.

The investment part of portfolio is constantly growing and today it comprises 60%. Operational part deals with serving domestic demand, foreign debt. Therefore 90% of it is focused on dollars. The share of operational part makes up $2-$2.5bln while total amount of NBA reserves amounts to $5.3bln.

The share of euro in investment portfolio is quiet large, he said.

"When portfolio grows, the share of euro will grow at the same time," he said.

Investment portfolio consists of different instruments. Currency reserves in this portfolio are placed in deposits, securities and part of it has submitted to foreign management.

"With the help of World Bank RAMP program we have almost learned methodology of large central banks and leading investment banks in the sphere of management of portfolio of currency reserves," Rustamov said.

At present, currency portfolio of State Oil Fund of Azerbaijan (SOFAZ) is balanced as follows: 50% of assets are placed in dollars and 40% in euro. The remaining 5% is placed in pound sterling and other 5% in above mentioned or other currencies. In the course of quarter of a year, this proportion can change, but must be balanced in line with this proportion. As of 4 September, assets of SOFAZ comprised $10.216bln.

The exchange rate for 12 September is 0.8155 AZN/USD.

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