CBA not consider choice of gold as reserve currency
Azerbaijan, Baku, May 27 / Trend N. Ismayilova /
The Central Bank of Azerbaijan (CBA) does not consider the choice of gold as a reserve currency in the management of foreign currency assets, CBA Deputy Chairman Avtandil Babayev said.
"Azerbaijan is carrying out diversification of foreign assets on the basis of a special strategy," Babayev said. Today, we manage the assets of three foreign convertible currencies. The question of using gold as a tool for back-up on the agenda is not on agenda.
Earlier, the Central Bank head Elman Rustamov said that the Azerbaijani government and the CBA are interested in creating gold reserves.
"The position of the Central Bank and the government is to preserve at least the gold extracted from the Azerbaijani oil fields in the country, including it in strategic foreign exchange reserves", Rustamov said.
From a fundamental point of view, as any kind of backup, gold is also the currency, and freely convertible, i.e., purchase-sale operations can be held with gold.
"As any government, we must also think about efficiency in the structure of foreign exchange reserves in future. At present, the government's position and CBA is to create certain reserves of gold," he said.
Strategic currency reserves increased by $3 billion in 2009, exceeding by $20 billion, and today they exceed $22 billion.
Official foreign exchange reserves held by the CBA, in the first quarter of 2010 totaled $5.510 billion. This index increased by 6.7 percent or $348.3 million compared to early 2010.
The State Oil Fund's assets as of April 1, 2010 amounted to 13 049.7 million manat ($16 243,3 million) and increased by 9.1 percent compared to early 2010. Strategic foreign reserves are formed from foreign exchange reserves, SOFAR's assets and deposits of the government.
The company Anglo Asian Mining PLC is the only gold producer in Azerbaijan. It has rights to develop six fields in the south-west of the country - Gadabay, Ordubad, Gosha Bulag, Gizil Bulag, Vejnali and Soyutlu based on the PSA agreement signed with the Azerbaijani government in August 1997. According to the contract, about 400 tons of gold, 2,500 tons of silver and 1.5 million tons of copper are planned to be mined from the fields.
First gold and silver were mined at Gadabay in May 2009. In general, it is planned to produce over 300,000 ounces of gold before 2015 at Gadabay field. At present, the volume of production, started in July 2009, reached 25,022 ounces.
On May 27, the official exchange rate is 0.8036 manat to $1.