State Oil Fund’s assets decline by 590 million USD

State Oil Fund’s assets decline by 590 million USD
Report: US dollar strengthening will increase the loss

Baku. 1 December. REPORT.AZ/ Assets of State Oil Fund of the Azerbaijan Republic (SOFAZ) declined for $590 million or 1.7% in November 2016, as currencies in the investment portfolio lost ground against US-dollar and gold prices went down.

Report’s experts group estimated that the Euro losing value against US-dollar caused $417 million devaluation of the Fund’s assets. The gold reserves followed Euro with $95 million loss of value. Assets in Turkish lira declined by $39 million, Japanese yen - $29 million, Russian ruble – $16.5 million, Korean von - $13.3 million, Chinese yuan - $7.6 million, Australian dollar –$6.3 million.

The Fund’s assets in British pound gained value worth $34 million in November.

Report’s experts believe it is reasonable to keep assets in US-dollar, as they forecast further strengthening of US currency in coming years.

Experts believe, the Fund to announce total $1.05 billion decline of assets in annual report by the year-end.

Report’s experts group forecasts, US-dollar to gain value against all currencies included in SOFAZ’s investment portfolio in coming 1-3 years: “We expect the gold to drop under $1000/per ounce. This, in case of oil prices slumping below $30, will shrink currency reserves and push to convert to US dollar with disadvantaged rate. That’s why the Fund should urgently increase share of US dollar in its portfolio”. 

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