In order to further broaden and diversify the currency basket, SOFAZ has started making investments in Chinese Yuan. The required license has already been obtained from the People’s Bank of China (PBC) for investments of up to RMB 3 billion and a contract has been signed with the PBC for the purchase and custody of yuan denominated sovereign and agency bonds. As of July 1 2015, first investments in Chinese Yuan have been made.
Going forward, Sofaz is planning to gain exposure to Chinese equity markets. To this end, we have taken steps to obtain the “Qualified Foreign Institution Investors” license granted by the China Securities Regulatory Commission.
In accordance with the “Rules on management of foreign currency assets of the State Oil Fund of the Republic of Azerbaijan” approved by the Presidential Decree No. 511 dated June 19, 2001, funds in SOFAZ’s investment portfolio can be invested in securities that are denominated in currencies of G7 countries (USA, Germany, Great Britain and Kingdom Northern Ireland, France, Italy, Canada and Japan), European Monetary Union member countries, Russia and Turkey, as well as the countries with a long-term credit rating not less than “A” (Standard & Poors, Fitch) or “A2” (Moody’s).