Currency structure of SOFAZ’s portfolio has favorable forecasts

Finance Materials 3 March 2020 20:00 (UTC +04:00)
Currency structure of SOFAZ’s portfolio has favorable forecasts

BAKU, Azerbaijan, March 3

By Eldar Janashvili – Trend:

The currency structure of the portfolio of the State Oil Fund of Azerbaijan (SOFAZ) has very favorable forecasts, Executive director of the Azerbaijani Center for Analysis of Economic Reforms and Communication Vusal Gasimli said.

“Presently, 56.6 percent of SOFAZ’s portfolio is in the US dollars, 31.4 percent - in euros, and 5.1 percent - in British pounds,” Gasimli added, Trend reports on March 3.

“At the same time, the share of the Chinese yuan in the portfolio does not even reach one percent,” the executive director added.

“Taking into account the fact that according to Trading Economics online platform, a gradual rise in the price of the US dollar to other currencies is forecasted in 2020, the currency structure of SOFAZ portfolio is very favorable in the near term,” Gasimli said.

“SOFAZ's extra-budgetary revenues due to the difference in the exchange rates amounted to 732 million manat ($430 million) in 2019,” the executive director said. “The currency structure of SOFAZ’s portfolio is adequate to the current shocks.”

“Presently, the most risky markets in the world are stock markets,” Gasimli said. “Trillions of dollars were lost in the global securities market last week. Thus, Dow Jones, NASDAQ and S&P 500 fell by more than 10 percent over the past week, but this is only 14.1 percent of SOFAZ’s portfolio.”

“In terms of assets, there is a conservative approach to managing SOFAZ’s portfolio, as SOFAZ does not invest in debt securities of other countries with a low risk rating and companies,” Gasimli said.

In 2019, the SOFAZ’s assets increased from $38.5 billion to $43.3 billion, an increase of 12.5 percent. During the first two months of this year, SOFAZ’s assets also increased.


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