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SOFAZ: Reducing transfers to the budget expands Oil Fund's active management

30 December 2025 16:29 (UTC +04:00)

"In the medium term, a gradual reduction of transfers from the State Oil Fund to the state budget is envisaged," said Fund's Executive Director Israfil Mammadov in an interview with APA.

"The volume of transfers to the state budget plays an important role in ensuring macroeconomic stability in the country, as well as in fulfilling the Fund’s savings function. On this basis, the funds accumulated in SOFAZ provide the government with the ability to maintain expenditures and support the economy during future economic difficulties or unexpected shocks. Within the framework of ongoing reforms in the country, the gradual reduction of transfers from the State Oil Fund to the state budget in the medium term is considered part of measures aimed at strengthening the long-term sustainability of the government’s fiscal policy and serves the more effective implementation of the Fund’s long-term mandate. This approach not only increases flexibility in managing the Fund’s assets but also creates additional maneuvering space to consider more structured investment opportunities in global markets. As a result of optimizing transfers, it becomes possible to more efficiently balance the Fund’s portfolio liquidity requirements with long-term investment objectives, which facilitates more effective risk management."

Note that, according to the information contained in the budget documents, transfers from the Oil Fund to the state budget will be gradually reduced and will be reduced from 14.5 billion manat in 2025 to 10.2 billion manat in 2029.