Fitch: Foreign-exchange reserves set to recover to USD8.6 billion
- 30 July 2018
Assets of the State Oil Fund of Azerbaijan (Sofaz) increased by 5.1% in 1Q18 to USD37 billion (77% of GDP), from USD36 billion in 2017, Fitch Ratings reported.
According to the Agency, the current account turned into a surplus in 2017 and we expect it to reach 6.4% of GDP in 2018, compared with a current 'BB' median deficit of 2.6% of GDP. Higher oil prices, completion of the Southern Gas Corridor project and production from the Shah Deniz II field will boost hydrocarbon exports. Rising external surplus will help rebuild foreign exchange reserves and Sofaz assets.
‘Azerbaijan's external balance sheet is strong relative to peers, with sovereign net foreign assets accounting for 81% of GDP at end-2017, compared with negative 3% of GDP for the current 'BB' median. FX reserves are set to recover to USD8.6 billion in 2018 (USD6.7 billion in 2017) or 4.5 months of import cover (3.9 months in 2017)’, the agency reported.