Exchange Fund Abridged Balance Sheet and Currency Board Account

The Hong Kong Monetary Authority (HKMA) announced today (27 August) that the total assets of the Exchange Fund amounted to HK$930.5 billion as at 31 July 1999.

The figure is included in the Exchange Fund Abridged Balance Sheet, which is released on a monthly basis together with the Currency Board Account. The footnotes on the Exchange Fund Abridged Balance Sheet refer to the related items on the Currency Board Account.

At end-July 1999, the total assets of the Exchange Fund, at HK$930.5 billion, were HK$22.5 billion lower than at end-June 1999. Both foreign currency assets and Hong Kong dollar assets decreased, by HK$5.5 billion and HK$17.0 billion respectively.

The decrease in Hong Kong dollar assets reflected mainly withdrawal of funds by the Treasury and the change in the market value of Hong Kong equities held by the Exchange Fund.

Figures in the Currency Board Account show that the monetary base at end-July was HK$196.0 billion, a decrease of HK$0.4 billion, or 0.2%, from end-June 1999. The decrease was primarily due to a decline in the Aggregate Balance of HK$1.1 billion, which was partly offset by increases in the market value of Exchange Fund Bills and Notes issued and Certificates of Indebtedness, of HK$0.6 billion and HK$0.1 billion respectively.

The backing assets decreased slightly from HK$216.7 billion to HK$216.5 billion. The more moderate decline in backing assets compared with that of the monetary base was largely due to net income and revaluation gains totalling HK$870 million. Reflecting this, the backing ratio increased marginally from 110.30% at end-June to 110.42% at end-July.

Attachment

Annex 1 : Abridged Balance Sheet of the Exchange Fund

Annex 2 : Currency Board Account

Hong Kong Monetary Authority

27 August 1999