Hong Kong's Latest Foreign Currency Reserve Assets Figures Released

The Hong Kong Monetary Authority (HKMA) announced today (Friday) that the official foreign currency reserve assets of Hong Kong amounted to US$113.7 billion at the end of August 2001 (end-July 2001: US$114.6 billion) (Table 1).

Including unsettled forward contracts, the foreign currency reserve assets of Hong Kong at the end of August 2001 also stood at US$113.7 billion (end-July 2001: US$114.6 billion).

According to an HKMA spokesperson, the US$0.9 billion decrease in settled foreign currency assets in the month of August was mainly due to a decrease in the amount of repurchase agreements outstanding at the end of the month. Transactions in repurchase agreements are part of the routine investment activities of the Exchange Fund. (An explanation of the accounting effect of repurchase agreements on the balance sheet of the Exchange Fund is included in the attached note.)

In terms of foreign currency reserves ranking, Hong Kong is the world's third largest holder of foreign currency reserves, after Japan and Mainland China (Table 2).

The total foreign currency reserve assets of US$113.7 billion represent over eight times the currency in circulation or about 45% of Hong Kong dollar M3, one of the highest ratios in the world.

Note:

Under a repurchase agreement ("repo"), the Exchange Fund sells securities to a counterparty and repurchases them at a pre-determined subsequent date and price. In accordance with generally accepted accounting policies, repo transactions are accounted for as secured borrowings, in which the cash received is accounted for as cash borrowed, against which a liability is recorded. The securities sold under repo agreements still remain as assets on the balance sheet. Therefore both the assets and liabilities of the balance sheet of the Exchange Fund are increased as a result of entering into repo transactions.

For further enquiries, please contact:

Caitlin Wong, Manager (Press), at 2878 1687 or
Jasmin Fung, Manager (Press), at 2878 8246

Hong Kong Monetary Authority
7 September 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 September 2001, the scheduled dates for issuing the press releases are as follows:

Table 1

Foreign Currency Reserve Assets of Hong Kong
(US$ billion)

                Excluding                   Including
                Unsettled     Unsettled     Unsettled
                FX Contracts  FX Contracts  FX Contracts

Dec 95          55.4          1.8           57.2
Dec 96          63.8          5.7           69.6
Dec 97          92.8          0.4           93.2
Dec 98          89.6          -             89.6
Dec 99          96.3          -             96.3

Jan 00          94.3          (0.1)         94.2
Feb 00          93.1          -             93.1
Mar 00          93.8          0.1           93.9
Apr 00          93.9          0.3           94.2
May 00          95.2          0.2           95.4
Jun 00          97.1          -             97.1
Jul 00          98.9          -             98.9
Aug 00          100.4         (0.3)         100.1
Sep 00          101.5         0.2           101.7
Oct 00          102.7         -             102.7
Nov 00          104.2         -             104.2
Dec 00          107.5         -             107.5

Jan 01          111.5         -             111.5
Feb 01          114.3         -             114.3
Mar 01          114.6         -             114.6
Apr 01          115.1         -             115.1
May 01          114.7         -             114.7
Jun 01          114.1         -             114.1
Jul 01          114.6         -             114.6
Aug 01          113.7         -             113.7

Figures for the end of 1995 and 1996 do not include Land Fund figures. The Land Fund was established on 1 July 1997 and its foreign currency reserve assets were included thereafter in the above compilation. The assets of the Land Fund were merged into the Exchange Fund in November 1998.

Table 2

Foreign Currency Reserves Ranking

               US$ billion     As at end of

(1) Japan           372.2       Aug 2001

(2) Mainland China  180.8       Jun 2001

(3) Hong Kong       113.7       Aug 2001

(4) Taiwan          113.1       Aug 2001

(5) Korea           99.0        Aug 2001

(6) Germany         81.3        Jul 2001

(7) Singapore       74.2        Jul 2001

(8) US              68.0        Aug 2001

(9) France          62.5        Jul 2001

(10) Switzerland    49.9        Jul 2001

Sources: HKMA, Reuters, Website of International Monetary Fund.