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$1,550.3 billion on 31 January 2009.

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 2009 the total assets of the Exchange Fund, at HK$1,550.3 billion, were HK$7.4 billion lower than at the end of December 2008. Foreign currency assets decreased by HK$13.0 billion while Hong Kong dollar assets increased by HK$5.6 billion.

The decline in foreign currency assets was due mainly to valuation losses on foreign currency investments, which was partly offset by purchases of foreign currencies with Hong Kong dollars and an increase in Certificates of Indebtedness.

The rise in Hong Kong dollar assets was due mainly to placements received from fiscal reserves, which were partly offset by a decrease in bank borrowings and valuation losses on Hong Kong equities held by the Exchange Fund.

The Currency Board Account shows that the Monetary Base at the end of January 2009 was HK$541.5 billion, an increase of HK$34.9 billion, or 6.9%, from the end of December 2008. The rise was due mainly to an increase in Certificates of Indebtedness reflecting the seasonal demand for banknotes around the Lunar New Year, and the increase in the Aggregate Balance from the sale of Hong Kong dollars for US dollars. The increase in the latter was offset by the issuance of additional Exchange Fund Bills.

The Backing Assets increased by HK$30.9 billion, or 5.6%, to HK$585.4 billion. The increase was attributable mainly to an increase in the Aggregate Balance and the issuance of Certificates of Indebtedness in the Monetary Base together with interest from investments. These increases were partly offset by revaluation losses. Reflecting this, the backing ratio declined from 109.48% at the end of December 2008 to 108.11% at the end of January 2009.

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

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

Hong Kong Monetary Authority
27 February 2009

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 2009, the scheduled dates for issuing the press releases are as follows: