Hong Kong's Latest Foreign Currency Assets Figures Released

The Hong Kong Monetary Authority (HKMA) announced that the official foreign currency assets of Hong Kong were US$92.1 billion at the end of August 1998. (July: US$96.5 billion). In terms of foreign currency reserves ranking, Hong Kong remains the third largest in the world, after Japan and Mainland China (Table 1).

"The fall in foreign currency assets can be attributed to both fiscal drawdowns by the Government Treasury and the Government's counter activities in the stock and futures markets," said a HKMA spokesman.

The foreign currency assets of Hong Kong are held in the Exchange Fund and the Land Fund. As at the end of August, the foreign currency assets held in the Exchange Fund were US$73.4 billion (end-July: US$77.8 billion) and in the Land Fund were US$ 18.7 billion (end-July: US$18.7 billion).

The total foreign currency assets of US$ 92.1 billion represent about eight times the currency in circulation or about 40% of Hong Kong dollar M3, one of the highest ratio in the world.

Including unsettled foreign exchange contracts, the foreign currency assets held in the Exchange Fund and the Land Fund were US$69 billion (end-July: US$77.3 billion) and US$18.6 billion (end-July: US$18.7 billion) respectively (Tables 2 and 3). Some US$4.4 billion in the Exchange Fund was sold on the last two trading days in August (28 and 31 August) for "value spot", that is, for settlement in two days on 1 September and 2 September respectively to fund the investment in Hong Kong stocks.

Hong Kong Monetary Authority

21 September 1998

TABLE 1

Source: HKMA, IMF, Reuters

* Detailed breakdown at Tables 2 and 3

TABLE 2

* This arises from "spot" transactions ( that is, settlement in two days) done at the end of August for settlement at the beginning of September.

TABLE 3

Note: The Land Fund was established on 1 July 1997. Figures prior to that date are therefore not available