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Press Releases

Exchange Fund Figures as at end-June 1998 Announced

The Hong Kong Monetary Authority (HKMA) today announced the un-audited balance sheet of the Exchange Fund as at the end of June 1998. The figures released show that in the first half of 1998, total assets of the Exchange Fund rose by 3.6% from HK$636.7 billion at the end of December 1997 to HK$659.5 billion at the end of June 1998. The accumulated surplus of the Exchange Fund, including minority interests, increased by 6.2% from HK$190.2 billion at the end of December 1997 to HK$202 billion at the end of June 1998.

In commenting on the figures, Mr. Joseph Yam, Chief Executive of the HKMA said: "The 6.2% increase in the accumulated surplus in a period of volatility, with financial turmoil in Asia, is highly encouraging."

The HKMA has continued to manage the Exchange Fund prudently. It adopted a defensive bond and currency strategy in the first half of 1998 amid volatile markets.

The HKMA considers the investment outlook for the second half of 1998 unfavourable. Volatility in global equity and bond markets is expected to increase with the emergence of Euro. The prospects for higher US interest rates are there and these would impact upon the US debt and equity markets adversely. With the US dollar continuing to be strong, the performance of non-US dollar assets of the Fund may also not be attractive in US dollar terms.

"But the HKMA will continue its prudent management of the Exchange Fund and achieve a fine balance in terms of return, risk and liquidity, in full compliance with the guidelines set by the Exchange Fund Advisory Committee," added Mr. Yam.

Compared to the same period last year, growth of the total assets of the Exchange Fund decelerated in the first half of 1998 due to a slowdown in the placements of fiscal reserves from the Government Treasury. It is expected that further drawdowns of fiscal reserves in the second half of 1998 may lead to a decrease in the size of the total assets of the Exchange Fund by the end of 1998.

Hong Kong Monetary Authority

23 July 1998

Exchange Fund Balance Sheet as at

  30 June
1998
31 December 199730 June 199731 December 199630 June 199631 December 1995
  (Unaudited)(Audited)(Unaudited)(Audited)(Unaudited)(Audited)
  HK$ MillionHK$ MillionHK$ MillionHK$ MillionHK$ MillionHK$ Million
  (Group)(Group)(Fund)(Fund)(Fund)(Fund)
ASSETS            
Cash and short-term funds 98,615 99,880 125,050 126,648 117,208 100,343
Fixed deposits 50,565 74,999 66,796 63,401 56,780 76,830
Certificates of deposit 43,522 69,387 74,578 64,065 49,880 23,657
Investments 446,774 374,588 292,302 270,869 249,326 250,702
Mortgage loans 4,141 650        
Fixed assets 287 290 167 166 97 58
Other assets 15,633 16,896 9,861 9,368 11,703 9,144
Total Assets
(Appendix A)
659,537 636,690 568,754 534,517 484,994 460,734

 

           
LIABILITIES            
Certificates of Indebtedness 84,675 87,015 91,985 82,480 78,270 77,600
Coins in circulation 5,648 5,399 4,564 4,164 3,797 3,597
Balance of banking system 497 296 480 474 3,925 1,762
Exchange Fund Bills and Notes 87,758 89,338 89,338 83,509 56,726 53,311
The Hong Kong Mortgage Corporation Limited Notes 1,362          
Fiscal Reserves Account 245,393 237,629 182,168 145,898 148,801 125,916
Placements by other institutions and other borrowings 24,887 21,062 13,504 39,125 25,813 34,302
Other liabilities 7,272 5,740 4,828 6,005 6,008 4,112
Total Liabilities 457,492 446,479 386,867 361,655 323,340 300,600
NET ASSETS 202,045 190,211 181,887 172,862 161,654 160,134

 

           
REPRESENTING            

 

           
ACCUMULATED SURPLUS 201,949 190,136 181,887 172,862 161,654 160,134
MINORITY INTERESTS 96 75        
TOTAL 202,045 190,211 181,887 172,862 161,654 160,134
             
             

 

Note : The consolidated balance sheet for 30 June 1998 and 31 December 1997 comprises the accounts of the Exchange Fund (Fund) and its subsidiary companies (Group).
Balance sheets for prior periods were not prepared on a consolidated basis. The financial effect of the change is immaterial.

TOTAL ASSETS

  30 June 199831 December 199730 June 199731 December 199630 June 199631 December 1995
  (Unaudited)(Audited)(Unaudited)(Audited)(Unaudited)(Audited)
HK$mn (Group)(Group)(Fund)(Fund)(Fund)(Fund)

 

           
Foreign currency assets 608,923 588,475 523,891 493,802 443,609 428,547
Hong Kong dollar assets 50,614 48,215 44,863 40,715 41,385 32,187
Total 659,537 636,690 568,754 534,517 484,994 460,734

 

           
Statistics on total foreign currency assets and forward foreign exchange transactions of the Exchange Fund are shown below.
HK$mn 30 June 199831 December 199730 June 199731 December 199630 June 199631 December 1995
Exchange Fund foreign currency assets excluding forward transactions 608,923 588,475 523,891 493,802 443,609 428,547
Net forward transactions 190 1,892 16,377 44,235 20,578 13,507
Including forward transactions 609,113 590,367 540,268 538,037 464,187 442,054
US$ equivalent at market rates US$78,609 mn US$76,191 mn US$69,736 mn US$69,559 mn US$59,966 mn US$57,171 mn

 

           
Note : The consolidated balance sheet for 30 June 1998 and 31 December 1997 comprises the accounts of the Exchange Fund (Fund) and its subsidiary
companies (Group). Balance sheets for prior periods were not prepared on a consolidated basis. The financial effect of the change is immaterial.
Last revision date: 1 August 2011
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