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$1,042.4 billion at 31 May 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 May 2004, the total assets of the Exchange Fund, at HK$1,042.4 billion, were HK$3.8 billion lower than at the end of April 2004. Foreign currency assets decreased by HK$6.8 billion while Hong Kong dollar assets increased by HK$3.0 billion.

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

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. These increases were partly offset by a decrease in the balance of the banking system and fiscal drawdowns.

The Currency Board Account shows that the Monetary Base at the end of May 2004 was HK$303.6 billion, a decrease of HK$19.9 billion, or 6.2%, from the end of April 2004. The decrease was mainly due to decreases in the Aggregate Balance and in Certificates of Indebtedness.

The Backing Assets decreased by HK$20.1 billion, or 5.7%, to HK$335.7 billion. The decrease was mainly driven by the corresponding decreases in the Aggregate Balance and in Certificates of Indebtedness in the Monetary Base together with revaluation losses on investments, which were partly offset by income from investments. At the end of May, the backing ratio stood at 110.59% compared with 110.01% at the end of April.

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) 2878 1480

Hong Kong Monetary Authority
25 June 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 June 2004, the scheduled dates for issuing the press releases are as follows: