The Hong Kong Monetary Authority (HKMA) announced that the official foreign currency assets of Hong Kong were US$88.4 billion at the end of September 1998. (End-August: US$92.1 billion).
According to a HKMA spokesman, "the US$3.7 billion drop in settled foreign currency assets during the month can be attributed to the settlement of the US$4.4 billion unsettled forward exchange contracts announced last month with the August foreign currency asset figures."
On the last two trading days in August (28 and 31 August), some US$4.4 billion in the Exchange Fund was sold for "value spot", that is, for settlement in two days on 1 September and 2 September respectively.
Adjusted for the settlement of these forward foreign currency contracts, the total foreign currency assets during the month actually rose slightly due primarily to investment gains.
The foreign currency assets of Hong Kong are held in the Exchange Fund and the Land Fund. As at the end of September, on a settled basis, the foreign currency assets held in the Exchange Fund were US$69.3 billion (end-August: US$73.4 billion) and in the Land Fund were US$19.1 billion (end-August: US$18.7 billion).
Including unsettled foreign exchange contracts, the foreign currency assets held in the Exchange Fund and the Land Fund were US$69.2 billion (end-August: US$69.0 billion) and US$19.0 billion (end-August: US$18.6 billion) respectively (Table 1 and 2).
In terms of foreign currency reserves ranking, Hong Kong remains the third largest in the world, after Japan and Mainland China (Table 3).
The total foreign currency assets of US$88.4 billion represent about eight times the currency in circulation or about 40% of Hong Kong dollar M3, one of the highest ratios in the world.
Hong Kong Monetary Authority
22 October 1998
TABLE 1
| Exchange Fund -- Foreign Currency Reserves (US$ billion) |
| . |
Excluding Unsettled FX Contracts |
Unsettled FX Contracts |
Including Unsettled FX Contracts |
| March 95 |
52.4 |
(0.2) |
52.2 |
| June 95 |
53.6 |
- |
53.6 |
| September 95 |
51.8 |
2.8 |
54.6 |
| December 95 |
55.4 |
1.8 |
57.2 |
| March 1996 |
58.1 |
1.7 |
59.8 |
| June 96 |
57.3 |
2.7 |
60.0 |
| September 96 |
55.4 |
6.7 |
62.1 |
| December 96 |
63.8 |
5.7 |
69.9 |
| February 1997 |
63.8 |
4.3 |
68.1 |
| March 1997 |
63.4 |
4.3 |
67.7 |
| April 1997 |
63.6 |
4.0 |
67.6 |
| May 1997 |
66.6 |
1.8 |
68.4 |
| June 1997 |
67.6 |
2.1 |
69.7 |
| July 1997 |
66.1 |
2.5 |
68.6 |
| August 1997 |
69.5 |
0.1 |
69.6 |
| September 1997 |
71.4 |
0.3 |
71.7 |
| October 1997 |
74.0 |
0.4 |
74.4 |
| November 1997 |
79.1 |
0.4 |
79.5 |
| December 1997 |
75.3 |
0.3 |
75.6 |
| January 1998 |
80.3 |
- |
80.3 |
| February 1998 |
78.6 |
- |
78.6 |
| March 1998 |
78.5 |
0.1 |
78.6 |
| April 1998 |
77.7 |
- |
77.7 |
| May 1998 |
77.9 |
- |
77.9 |
| June 1998 |
77.9 |
- |
77.9 |
| July 1998 |
77.8 |
(0.5) |
77.3 |
| August 1998 |
73.4 |
(4.4)* |
69.0 |
| September 1998 |
69.3 |
(0.1) |
69.2 |
* 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 2
| Land Fund -- Foreign Currency Reserves (US$ billion) |
| . |
Excluding Unsettled FX Contracts |
Unsettled FX Contracts |
Including Unsettled FX Contracts |
| July 1997 |
15.6 |
0.1 |
15.7 |
| August 1997 |
15.8 |
0.1 |
15.9 |
| September 1997 |
16.7 |
0.4 |
17.1 |
| October 1997 |
17.4 |
(0.1) |
17.3 |
| November 1997 |
17.4 |
0 |
17.4 |
| December 1997 |
17.5 |
0.1 |
17.6 |
| January 1998 |
17.8 |
- |
17.8 |
| February 1998 |
18.1 |
- |
18.1 |
| March 1998 |
18.3 |
- |
18.3 |
| April 1998 |
18.5 |
(0.1) |
18.4 |
| May 1998 |
18.5 |
- |
18.5 |
| June 1998 |
18.6 |
- |
18.6 |
| July 1998 |
18.7 |
- |
18.7 |
| August 1998 |
18.7 |
(0.1) |
18.6 |
| September 1998 |
19.1 |
(0.1) |
19.0 |
Note: The Land Fund was established on 1 July 1997. Figures prior to that date are therefore not available
TABLE 3
| Foreign Exchange Reserves Ranking |
| - |
- |
US$BN |
As at end of |
| (1) |
Japan |
212.1 |
Sept 1998 |
| (2) |
China |
141.1 |
Sept 1998 |
| (3) |
Hong Kong |
88.4* |
Sept 1998 |
| (4) |
Germany |
84.4 |
Aug 1998 |
| (5) |
Taiwan |
83.7 |
Aug 1998 |
| (6) |
US |
74.3 |
Aug 1998 |
| (7) |
Spain |
68.8 |
Aug 1998 |
| (8) |
Singapore |
68.2 |
Aug 1998 |
| (9) |
Brazil |
48.0 |
Oct 1998 |
| (10) |
Italy |
46.4 |
Aug 1998 |
Source: HKMA, IMF, Reuters
* Detailed breakdown at Tables 1 and 2
