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$1,011.9 billion at 31 July 2004.

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 July 2004, the total assets of the Exchange Fund, at HK$1,011.9 billion, were HK$35.9 billion lower than at the end of June 2004. Both foreign currency assets and Hong Kong dollar assets decreased, by HK$31.9 billion and HK$4.0 billion respectively.

The decrease in foreign currency assets was mainly due to sale of foreign currencies for Hong Kong dollars, valuation losses on foreign currency investments and a decrease in securities purchased but settled in the following month. These decreases were partly offset by an increase in repurchase agreement outstanding. The decrease in Hong Kong dollar assets was mainly due to decreases in the balance of the banking system and bank borrowings. These decreases were partly offset by the purchase of Hong Kong dollars from foreign currencies and placements received from fiscal reserves.

The Currency Board Account shows that the Monetary Base at the end of July 2004 was HK$281.0 billion, a decrease of HK$24.3 billion, or 8.0%, from the end of June 2004. The decrease was mainly due to a decrease in the Aggregate Balance.

The Backing Assets decreased by HK$23.7 billion, or 7.0%, to HK$314.3 billion. The decrease was mainly driven by the corresponding decrease in the Aggregate Balance in the Monetary Base, which was partly offset by income from investments. Reflecting this, the backing ratio increased from 110.70% at the end of June to 111.84% at the end of July.

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

For further enquiries, please contact:

Jasmin Fung, Manager (Press), at 2878 8246 or
Thomas Chan, Senior Manager (Press), at 2878 1480

Hong Kong Monetary Authority
27 August 2004

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 August 2004, the scheduled dates for issuing the press releases are as follows: