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Fitch: Gold strengthens Azerbaijan’s external financial position and rating resilience

25 August 2026 10:56 (UTC +04:00)

The international rating agency Fitch Ratings has assessed the impact of Azerbaijan’s gold reserves on its external financial position, APA-Economics reports.

The rating agency said the rise in gold prices has had a positive impact on the volume of assets of the State Oil Fund of Azerbaijan (SOFAZ).

According to the agency, as of the end of the first quarter of 2026, SOFAZ’s investment portfolio amounted to $73.5 billion, equivalent to 93.2% of Azerbaijan’s GDP projected by Fitch for 2026: “Gold is the largest component of the Fund’s investment portfolio, accounting for 36% of the portfolio. From 2023 through the end of the first quarter of 2026, gold reserves directly contributed $19.4 billion to the increase in SOFAZ’s assets. Of this increase, 26% was related to the growth in the physical volume of gold reserves.”

Fitch notes that Azerbaijan’s “BBB-” sovereign rating benefits from an additional advantage in terms of external financial indicators due to SOFAZ’s large volume of assets. The Fund’s assets support the country’s exceptionally strong foreign currency liquidity and net external creditor position.

According to the agency’s assessment, although the rise in gold prices has had a clearly positive impact on the volume of SOFAZ’s assets, this effect may be partially offset by changes in the volume of gold reserves. As an example, the rating agency cited SOFAZ’s sale of part of its gold reserves in January-April 2026 in order to rebalance its portfolio.

Fitch believes that although high gold prices support Azerbaijan’s rating, they are unlikely to lead to a further upgrade in the near term.

The report also states that as of the end of 2025, gold accounted for 32.2% of Azerbaijan’s sovereign external assets and only 0.2% of the country’s goods exports. Azerbaijan’s sovereign external assets include SOFAZ’s assets.

According to Fitch, in countries such as Azerbaijan that hold gold as part of their external assets, a sharp decline in gold prices could lead to changes in the composition of external assets. This could mitigate the risks arising from a decline in prices.