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$1,285.0 billion on 31 August 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 August 2007 the total assets of the Exchange Fund, at HK$1,285.0 billion, were HK$10.5 billion higher than at the end of July 2007. Foreign currency assets increased by HK$10.9 billion while Hong Kong dollar assets decreased by HK$0.4 billion.

The rise in foreign currency assets was due mainly to interest and dividend income from foreign currency assets and an increase in securities purchased but settled in the following month. The decline in Hong Kong dollar assets was due mainly to a decrease in Exchange Fund Bills and Notes issued but not yet settled and fiscal drawdowns, which were partly offset by valuation gains of Hong Kong equities held by the Exchange Fund.

The Currency Board Account shows that the Monetary Base at the end of August 2007 was HK$298.1 billion, an increase of HK$1.3 billion, or 0.4%, from the end of July 2007. The rise was due mainly to increases in Certificates of Indebtedness and market value of Exchange Fund Bills and Notes outstanding.

The Backing Assets decreased by HK$4.7 billion, or 1.4%, to HK$328.9 billion. The decrease was attributable mainly 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 in the Monetary Base, interest from investments and revaluation gains. Reflecting this, the backing ratio declined from 112.39% at the end of July 2007 to 110.32% at the end of August 2007.

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

For further enquiries, please contact:
Thomas Chan, Senior Manager (Press), at 2878 1480 or
Hing-fung Wong, Officer (Press), at 2878 1802

Hong Kong Monetary Authority
21 September 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 September 2007, the scheduled dates for issuing the press releases are as follows: