Fitch: SOFAZ Gold Reserves Reach 36% of Portfolio, Fund Assets at $73.5 Billion

The gold reserves of the State Oil Fund of the Republic of Azerbaijan (SOFAZ) are a key factor in strengthening Azerbaijan's sovereign external buffers.

As reported by FinFly.News, citing international rating agency Fitch Ratings, as of the end of the first quarter of 2026, SOFAZ's investment portfolio reached $73.5 billion, equivalent to about 93.2% of Azerbaijan's projected annual GDP.

Gold is the largest component of SOFAZ's portfolio, accounting for 36% of the fund's total assets. At the end of 2025, gold's share in Azerbaijan's sovereign external assets stood at 32.2%.

Agency analysts emphasize that the rise in precious metal prices directly contributed to an increase in SOFAZ's assets by $19.4 billion from 2023 to Q1 2026. Of this growth, 26% was achieved through an increase in gold reserves.

Additionally, from 2024 to June 2026, SOFAZ purchased a total of 76 tonnes of gold, ranking among the world's largest institutional buyers after the central banks of Poland (274 tonnes), China (111 tonnes), and India (77 tonnes).

"The positive effect of high gold prices was partially offset by portfolio management operations—in particular, cumulative sales of part of the gold reserves in January-April 2026 for rebalancing purposes," the Fitch report states.

Unlike other countries in the region (Uzbekistan and Kyrgyzstan), gold in Azerbaijan accounts for a negligible share of merchandise exports (only 0.2% in 2025). The country maintains a traditional current account surplus independent of precious metal exports, the agency emphasizes.

"Azerbaijan stores its gold reserves entirely or predominantly domestically. Physical storage within the country reduces political and legal risks (unlike storage in foreign hubs such as the Bank of England), and the liquidity of Azerbaijani gold is assessed as equal to assets held abroad," the agency notes.

The agency recalls that Azerbaijan's sovereign rating is 'BBB-' with a 'Stable' outlook.

Fitch characterized Azerbaijan's net external creditor position and currency liquidity as "exceptionally strong." The country's credit rating already includes a qualitative uplift (+1 notch) in the external finance category, reflecting SOFAZ's substantial reserves.

"While higher gold prices have an obvious positive impact on SOFAZ's asset size and support the country's rating, they alone are unlikely to lead to an immediate further upgrade of Azerbaijan's credit rating," Fitch Ratings concludes.