Exchange Fund Abridged Balance Sheet and Currency Board Account

The Hong Kong Monetary Authority (HKMA) announced today (24 January 2000) that the total assets of the Exchange Fund amounted to HK$1,003 billion as at 31 December 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 figures in the Exchange Fund Abridged Balance Sheet are unaudited. The audit of the Exchange Fund's annual accounts by the Director of Audit is in progress.

At the end of December 1999, the total assets of the Exchange Fund, at HK$1,003 billion, were HK$34.7 billion higher than at the end of November 1999. Both foreign currency assets and Hong Kong dollar assets increased, by HK$31.2 billion and HK$3.5 billion respectively.

The increase in foreign currency assets was mainly due to the issue of additional currency notes, which are backed by US dollars deposited by the note issuing banks with the Exchange Fund.

The increase in Hong Kong dollar assets was due largely to the increase 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 the end of December was HK$234.4 billion, an increase of HK$31.8 billion, or 15.72%, from the end of November 1999. The rise was mainly attributable to the increases in Certificates of Indebtedness and the Aggregate Balance, by HK$26.5 billion and HK$4.7 billion respectively. The former reflects the seasonal demand for cash around Christmas and New Year as well as increased cash holdings during the Year 2000 critical period.

The backing assets increased by HK$32.3 billion, or 14.37%, from HK$224.7 billion to HK$257.0 billion. The rise was mainly driven by the corresponding increases in Certificates of Indebtedness and the Aggregate Balance in the Monetary Base, together with net income and revaluation gains. At the end of December, the backing ratio stood at 109.64%, compared with 110.93% at the end of November.

Attachment

Annex 1 : Abridged Balance Sheet of the Exchange Fund

Annex 2 : Currency Board Account

Hong Kong Monetary Authority

24 January 2000