Exchange Fund Abridged Balance Sheet and Currency Board Account

The Hong Kong Monetary Authority (HKMA) announced today (Friday) that the total assets of the Exchange Fund amounted to HK$1,042.5 billion as at 31 May 2001.

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 May 2001, the total assets of the Exchange Fund, at HK$1,042.5 billion, were HK$8.2 billion lower than at the end of April 2001. Both foreign currency assets and Hong Kong dollar assets decreased, by HK$2.7 billion and HK$5.5 billion respectively.

The decrease in foreign currency assets was mainly due to a decline in backing assets resulting from a drop in currency notes outstanding. The decrease in Hong Kong dollar assets was mainly due to the decrease in the market value of Hong Kong equities held by the Exchange Fund and reductions in placements by other government funds.

Figures in the Currency Board Account show that the monetary base at the end of May 2001 was HK$217.2 billion, a decrease of HK$3.3 billion, or 1.5%, from the end of April 2001. The decrease was mainly due to a decrease in Certificates of Indebtedness of HK$3.6 billion during the month. At the end of April, currency note issuance increased ahead of the month-end holiday weekend.

The backing assets decreased by HK$2.2 billion, or 0.9%, from HK$243.5 billion to HK$241.3 billion. The decline was mainly driven by the corresponding decrease in Certificates of Indebtedness in the monetary base, which was partly offset by income from investment and revaluation gain of altogether HK$1.5 billion. Reflecting this, the backing ratio increased from 110.48% at the end of April to 111.09% at the end of May.

Attachment

Annex 1 : Abridged Balance Sheet of the Exchange Fund

Annex 2 : Currency Board Account

For further enquiries, please contact:

Caitlin Wong, Manager (Press), at 2878 1687 or
Thomas Chan, Senior Manager (Press), at 2878 1480

Hong Kong Monetary Authority
29 June 2001

At present, four press releases relating to the Exchange Fund's data are issued by the HKMA each month. Three of these releases are issued to disseminate monetary data in accordance with the International Monetary Fund's Special Data Dissemination Standard (SDDS). The fourth press release, on the Exchange Fund's Abridged Balance Sheet and Currency Board Account, is made in accordance with the HKMA's policy of maintaining a high level of transparency. For the month of June, the scheduled dates for issuing the press releases are as follows: