Exchange Fund Abridged Balance Sheet and Currency Board Account

The Hong Kong Monetary Authority (HKMA) announced today (Friday) that the total assets of the Exchange Fund amounted to HK$979.9 billion as at 30 September 2003.

The figure is included in the Exchange Fund Abridged Balance Sheet, which is released on a monthly basis together with the Currency Board Account.

At the end of September 2003, the total assets of the Exchange Fund, at HK$979.9 billion, were HK$16.9 billion higher than at the end of August 2003. Both foreign currency assets and Hong Kong dollar assets increased, by HK$10.5 billion and HK$6.4 billion respectively.

The increase in foreign currency assets was mainly due to valuation gains of foreign currency investments and an increase in securities purchased but settled in the following month. These increases were partly offset by the sale of foreign currencies for Hong Kong dollars and a decrease in repurchase agreements outstanding.

The increase in Hong Kong dollar assets was mainly due to the purchase of Hong Kong dollars from foreign currencies, an increase in bank borrowings and valuation gains in the market value of Hong Kong equities held by the Exchange Fund which were partly offset by fiscal drawdowns.

Figures in the Currency Board Account show that the monetary base at the end of September 2003 was HK$257.9 billion, an increase of HK$2.9 billion, or 1.1%, from the end of August 2003. The increase was mainly due to increases in Certificates of Indebtedness and the Aggregate Balance.

The backing assets increased by HK$1.1 billion, or 0.4%, to HK$286.5 billion. The increase was mainly attributable to the corresponding increase in Certificates of Indebtedness and the Aggregate Balance in the monetary base together with the income from investments, which were partly offset by exchange losses triggered by a stronger Hong Kong dollar. Reflecting this, the backing ratio decreased from 111.91%, at the end of August, to 111.08% at the end of September.

Attachment
Annex 1 : Abridged Balance Sheet of the Exchange Fund
Annex 2 : Currency Board Account

For further enquiries, please contact:

Kevin Ip, Manager (Press), at 2878 1687 or
Thomas Chan, Senior Manager (Press), at 2878 1480

Hong Kong Monetary Authority
31 October 2003

At present, four press releases relating to the Exchange Fund's data are issued by the HKMA each month. Three of these releases are issued to disseminate monetary data in accordance with the International Monetary Fund's Special Data Dissemination Standard (SDDS). The fourth press release, on the Exchange Fund's Abridged Balance Sheet and Currency Board Account, is made in accordance with the HKMA's policy of maintaining a high level of transparency. For the month of October 2003, the scheduled dates for issuing the press releases are as follows: