Fluctuation in dollar and euro to neutrally affect assets of SOFAR

Azerbaijan, Baku, June 3 /Trend, E.Ismayilov/

The volatility in European and American currencies will neutrally affect the assets of the State Oil Fund of Azerbaijan (SOFAR), the executive director of SOFAR Shahmar Movsumov said on Friday.
"Given that 50 percent of the Fund's assets are placed in U.S. dollars, 40 percent - in euros, five percent - pounds, and five percent - in other currencies, the fluctuations in rates will neutrally affect the Fund," said Movsumov.
That is why, he said, the Oil Fund is not considering changing the currency composition of its own portfolio.
According to the British analysts, the dollar-euro rate will reach 1.45 euro per $1 in the second quarter, and reduce to 1.4 euro per $1 in the third quarter and 1.3 euro per $1 in the fourth quarter. The dollar-euro rate will be equal in 2012, they report.
The euro-dollar rate will grow if the difference between the European Central Bank (ECB) and the Fed interest rates increases, Fredrik Erixon, the director of the European Center for International Political Economy (ECIPE), told Trend.
At its meeting on April 7, the ECB increased its interest rate by 0.25 basic points to 1.25% in line with expectations.
The Fed's basic interest rate is currently at a record low, oscillating from 0 percent to 0.25 percent annually.
In the first quarter of 2011, 55.26 percent of the SOFAR investment portfolio concentrated in the U.S. daolar ($14.244.61 billion), 39.67 percent - in euros (7.236.06 billion euros) and 5.07 percent - in British pounds Sterling (813.21 million pounds).
The amount of investment portfolio totaled $25.779.32 billion, making up 99.93 percent of total assets.
SOFAZ assets, as of April 1, 2011, increased by 13.3 percent compared with the beginning of this year ($22.766.8 billion) and totaled $25.796.9 billion.

SOFAR was established in 1999.