Azerbaijan’s State Oil Fund, known as Sofaz, is considering investing in the Chinese yuan as it broadens expansion into new currencies to diversify reserves.
“We are currently exploring the Chinese currency,” Sofaz Executive Secretary Shahmar Movsumov told reporters today in Baku, the Azeri capital. “There are some institutional problems to resolve. Investors cannot just come and invest in China any time they wish. There are some very strict terms.”
Sofaz, established in 1999 to manage the nation’s income from the sale of oil and natural gas, added the Russian ruble, Turkish lira and Australian dollar to its portfolio last year and began investing in gold and real estate. It had $34.1 billion in assets on Jan. 1, equivalent to almost 50 percent of the Caspian Sea nation’s economy.
Chinese Premier Li Keqiang has pledged to come up with a plan this year that would allow investment capital to move more freely in and out of the country. People’s Bank of China Deputy Governor Yi Gang said last month the yuan’s trading band will be widened “in the near future.” The currency touched 6.1210 per dollar on May 27, the strongest level since the government unified official and market exchange rates at the end of 1993, and has gained 0.6 percent in May.