Chinese Yuan May Be Included in Currency Basket of SOFAR

This year, the Chinese yuan may be included in the currency basket of the State Oil Fund (SOFAR), as the head of SOFAR, Shahmar Movsumov told reporters.

According to him, all the assets of the Fund, including the investment portfolio, in order to diversify them, are denominated in foreign currency - mainly in US dollars, euros, British pounds and other currencies.

Given that the assets in foreign currency are recorded on the balance sheet in manats, fluctuations in foreign currency exchange rates with respect to the manat lead to exchange rate differences - accounting profit or loss as a result of accounting the assets in AZN and fluctuations in its value relative to other currencies, even if there is no change in the assets held in foreign currency.

"Thus, depending on currency fluctuations exchange differences may be either a loss or a profit of the Fund. Taking into account the fact that it of accounting nature, it has no effect on the fair value of all assets of SOFAR stored in a foreign currency," said Movsumov.

He noted that in the framework of the investment policy of SOFAR up to half of the assets are placed in US dollars, up to 35% in euros, up to 5% - in British pounds, and the remaining 10% are in other currencies, including the Russian ruble, the Australian dollar, the Korean won and the Turkish lira.

He also added that the State Oil Fund in the future will continue to diversify the currency basket, given the opportunities in the financial market.

As of January 1, 2015, SOFAR assets, increasing by 3.42 percent compared with the beginning of 2014 (USD 35 877.5 million), amounted to USD 37 104.1 million. --17D-