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$976.7 billion as at 31 October 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 October 2003, the total assets of the Exchange Fund, at HK$976.7 billion, were HK$3.2 billion lower than at the end of September 2003. Foreign currency assets decreased by HK$6.8 billion while Hong Kong dollar assets increased by HK$3.6 billion.

The decrease in foreign currency assets was mainly due to decreases in repurchase agreement outstanding and securities purchased but settled in the following month which were partly offset by purchase of foreign currencies from Hong Kong dollars.

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

Figures in the Currency Board Account show that the monetary base at the end of October 2003 was HK$260.3 billion, an increase of HK$2.4 billion, or 0.9%, from the end of September 2003. The increase was mainly due to an increase in the Aggregate Balance which was partly offset by a decrease in Certificates of Indebtedness.

The backing assets increased by HK$3.0 billion, or 1.1%, to HK$289.5 billion. The increase was mainly attributable to the corresponding increase in the Aggregate Balance and partly offsetting decrease in Certificates of Indebtedness, together with net income and revaluation gains of HK$0.7 billion. Reflecting this, the backing ratio increased from 111.08%, at the end of September, to 111.23% at the end of October.

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
28 November 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 November 2003, the scheduled dates for issuing the press releases are as follows: