Exchange Fund Abridged Balance Sheet and Currency Board

The Hong Kong Monetary Authority (HKMA) announced today (Wednesday) that the total assets of the Exchange Fund amounted to HK$1,228.1 billion on 31 January 2007.

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 January 2007 the total assets of the Exchange Fund, at HK$1,228.1 billion, were HK$51.4 billion higher than at the end of December 2006. Foreign currency assets increased by HK$20.1 billion and Hong Kong dollar assets increased by HK$31.3 billion.

The rise in foreign currency assets was due mainly to increases in securities purchased but settled in the following month, Certificates of Indebtedness and income from foreign currency assets. The rise in Hong Kong dollar assets was due mainly to placements received from fiscal reserves, which was partly offset by a decrease in bank borrowings.

The Currency Board Account shows that the Monetary Base at the end of January 2007 was HK$300.0 billion, an increase of HK$2.1 billion, or 0.7%, from the end of December 2006. The rise was due mainly to increases in Certificates of Indebtedness and Government-issued currency notes, which were partly offset by a decrease in the market value of Exchange Fund Bills and Notes outstanding.

The Backing Assets decreased by HK$3.1 billion, or 0.9%, to HK$329.5 billion. The decrease was mainly attributable to the transfer of assets out of the Backing Portfolio to the Investment Portfolio in accordance with the arrangement approved by the Exchange Fund Advisory Committee. The decline was partly offset by the issuance of Certificates of Indebtedness and Government-issued currency notes in the Monetary Base, interest from investments and revaluation gains. Reflecting this, the backing ratio declined from 111.65% at the end of December 2006 to 109.83% at the end of January 2007.

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

For further enquiries, please contact:
Sara Yip, Manager (Press), at 2878 8246 or
Hing-fung Wong, Officer (Press), at 2878 1802

Hong Kong Monetary Authority
28 February 2007

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 February 2007, the scheduled dates for issuing the press releases are as follows: