Azernews.Az

By Nigar Abbasova

Azerbaijan's sovereign wealth fund SOFAZ sold some $246 million through currency auctions in December 2016.

In November, SOFAZ sold $301.5 million, while the total volume of financial means sold to local banks in 2016 amounted to $4.92 billion.

The Fund plans to continue the sale of currency through auctions in 2017. The sale is being implemented within the transfers of the Fund to the state budget, while the volume of transfers is planned at the level of nearly 7.7 billion manats ($4.4 billion) in 2016 and 6.1 billion manats ($3.46 billion) in 2017.

Main revenues of the institution are being received in foreign currency, particularly in the US dollar, therefore, to implement its commitments the Fund converts the currency obtained from transactions into manats.

The Fund implements currency sales through auctions organized by the Central Bank of Azerbaijan (CBA), to prevent a negative impact of large-scale sales of currency on the market, as well as for the timely implementation of budget commitments.

Under the mechanism launched in October, the official rate of the national currency is determined on the basis of the weighted average rate in accordance with the transactions concluded with commercial banks in the interbank foreign exchange market and in auctions. On the days when no auction is held, the official rate of the manat against the US dollar will be set based on the weighted average rate formed in the currency market on the basis of the currency purchase and sale transactions between banks.

The Fund plans to increase its assets by $1 billion in 2017. Assets of the Fund as of October 1 stood at $35.82 billion, with some $33.95 billion accounting for the investment portfolio and 1.87 billion falling to a share of manat account.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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