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$1,030.5 billion at 31 October 2004.

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

At the end of October 2004 the total assets of the Exchange Fund, at HK$1,030.5 billion, were HK$11.7 billion higher than at the end of September 2004. Both foreign currency assets and Hong Kong dollar assets increased, by HK$11.6 billion and HK$0.1 billion respectively.

The increase in foreign currency assets was mainly due to purchases of foreign currencies with Hong Kong dollars, income from foreign currency assets and valuation gains on foreign currency investments. These increases were partly offset by decreases in Certificates of Indebtedness and repurchase agreement outstanding.

The increase in Hong Kong dollar assets was mainly due to increases in bank borrowings and the balance of the banking system, which were partly offset by fiscal drawdowns and the sale of Hong Kong dollars for foreign currencies.

The Currency Board Account shows that the Monetary Base at the end of October 2004 was HK$282.6 billion, an increase of HK$3.9 billion, or 1.4%, from the end of September 2004. The rise was mainly due to increases in the Aggregate Balance and the market value of Exchange Fund Bills and Notes outstanding, by HK$5.5 billion and HK$0.7 billion respectively. These increases were partly offset by a decrease in Certificates of Indebtedness of HK$2.4 billion.

The Backing Assets increased by HK$3.1 billion, or 1.0%, to HK$315.0 billion reflecting the net impact of an increase in the Aggregate Balance and a decline in Certificates of Indebtedness. At the end of October, the backing ratio stood at 111.45%, compared with 111.91% 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
26 November 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 November 2004, the scheduled dates for issuing the press releases are as follows: