Exchange Fund Abridged Balance Sheet and Currency Board Account

The Hong Kong Monetary Authority (HKMA) announced today (30 March 2000) that the total assets of the Exchange Fund amounted to HK$985.0 billion as at 29 February 2000.

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

At the end of February 2000, the total assets of the Exchange Fund, at HK$985.0 billion, were HK$5.2 billion lower than at the end of January. Foreign currency assets decreased by HK$17.6 billion while Hong Kong dollar assets increased by HK$12.4 billion.

The decrease in foreign currency assets was mainly due to a reduction in currency notes outstanding. 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 February was HK$211.1 billion, a decrease of HK$12.6 billion, or 5.64%, from the end of January 2000. The decrease was mainly attributable to decreases in Certificates of Indebtedness and the Aggregate Balance, by HK$11.3 billion and HK$1.6 billion respectively. The former reflects mainly reduced demand for cash after the Chinese New Year.

The backing assets decreased by HK$11.7 billion, or 4.74%, from HK$247.0 billion to HK$235.3 billion. The decline was mainly driven by the corresponding decreases in Certificates of Indebtedness and the Aggregate Balance in the monetary base, which were partly offset by net income and revaluation gains of HK$1.3 billion. Reflecting this, the backing ratio increased from 110.43% at the end of January to 111.48% at the end of February.

Attachment

Annex 1 : Abridged Balance Sheet of the Exchange Fund

Annex 2 : Currency Board Account

Hong Kong Monetary Authority

30 March 2000