Azerbaijan to increase gold reserves
The country plans to double its gold reserves to 30 tonnes this year, from the current 15 tonnes.
Posted: Wednesday , 06 Mar 2013
MUMBAI (Mineweb) -
In January this year, Azerbaijan acquired gold bullion for the first time in more than three years.
An additional 1 tonne of gold was purchased by the State Oil Fund of the Republic of Azerbaijan on March 1. This was temporarily stored in the vaults of the Central Bank of the Republic of Azerbaijan.
Around 17,422 kilo was included into the State Oil Fund of Azerbaijan (Sofaz) investment portfolio as of March 1, 2013.
In a repatriation process, Sofaz had started placing its gold reserves in the vaults of the Central Bank of Azerbaijan in Baku.
Reports that appeared in the Azerbaijan media note that the gold purchase has been going on since February 2012 to the tune of 10,000 ounces a week. By early 2013, the Fund had bought gold assets up to 14,934 kilo (480,146 ounces).
Sofaz investment policy allows it to keep 5% of its assets in gold. In January this year, the Fund placed the first tonne of physical gold in the safety vaults of the Central Bank. The gold was purchased on the London Stock Exchange.
Initially, London-based warehousing units of JPMorgan were selected for storage, but a decision was taken to transfer all the gold in Azerbaijan.
Sofaz is to establish a special treasury in the newly constructed administrative building. The construction of the administrative building is expected to be completed by the end of 2013.
According to the executive director of Sofaz, Shahmar Movsumov, Azerbaijan plans to have gold reserves of up to 30 tonnes by the end of this year.
He noted that, so far Sofaz had obtained 15 tonnes of gold amounting to $1.5 billion. Around 330 kilo of gold was brought to Azerbaijan every week, Movsumov noted.
These moves come in the wake of a strong trend toward increased gold purchases by central banks particularly in 'non-traditional' emerging markets. Within the region, reports indicate that Russia and Kazakhstan have expanded their gold reserves for a fourth straight month in January.
According to data from the International Monetary Fund, while Azerbaijan purchased a tonne of gold, with its holding’s rising for the first time since May 2009, when it held 64 ounces, Kazakhstan and Belarus purchased 0.5 tonnes each. Tajikistan, on the other hand, purchased 100 kilo of the precious metal.
Turkey, Venezuela and several other countries have also increased their gold reserves significantly.