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$2,151.7 billion on 31 December 2009.

The figure is included in the Exchange Fund Abridged Balance Sheet, which is released monthly together with the Currency Board Account. The figures in the Exchange Fund Abridged Balance Sheet and the Currency Board Account are unaudited. The audit of the Exchange Fund's annual financial statements by the Director of Audit is in progress.

At the end of December 2009 the total assets of the Exchange Fund, at HK$2,151.7 billion, were HK$83.7 billion lower than at the end of November 2009. Foreign currency assets decreased by HK$83.8 billion while Hong Kong dollar assets increased by HK$0.1 billion.

The decline in foreign currency assets was due mainly to a decrease in unsettled purchases of securities and valuation losses on foreign currency investments. These decreases were 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 valuation gains on Hong Kong equities.

The Currency Board Account shows that the Monetary Base at the end of December 2009 was HK$1,010.7 billion, an increase of HK$14.6 billion, or 1.5%, from the end of November 2009. The rise in the Monetary Base was due mainly to an inflow of funds into the Hong Kong dollar and an increase in Certificates of Indebtedness. The latter reflected the seasonal demand for banknotes around Christmas and New Year.

The Backing Assets increased by HK$11.7 billion, or 1.1%, to HK$1,081.1 billion. The increase was attributable mainly to the rise in the Monetary Base together with interest from investments. These increases were partly offset by revaluation losses. Reflecting this, the backing ratio decreased from 107.36% at the end of November 2009 to 106.96% at the end of December 2009.

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

For further enquiries, please contact:
Hing-fung Wong, Manager (Communications), at 2878 1802 or
Yokee Wong, Manager (Communications), at 2878 1213

Hong Kong Monetary Authority
29 January 2010

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 January 2010, the scheduled dates for issuing the press releases are as follows: