Exchange Fund Abridged Balance Sheet and Currency Board Account

The Hong Kong Monetary Authority (HKMA) announced today (January 25) that the total assets of the Exchange Fund amounted to HK$980.6 billion as at 31 December 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. The figures in the Exchange Fund Abridged Balance Sheet and Currency Board Account are unaudited. The audit of the Exchange Fund's annual accounts by the Director of Audit is in progress.

At the end of December 2001, the total assets of the Exchange Fund, at HK$980.6 billion, were HK$23.0 billion lower than at the end of November 2001. Both foreign currency assets and Hong Kong dollar assets decreased, by HK$11.0 billion and HK$12.0 billion respectively.

The decrease in foreign currency assets was mainly due to a decrease in the amount of repurchase agreements outstanding and revaluation effects on foreign currency investments, which were partly offset by an increase in Certificates of Indebtedness.

The decrease in Hong Kong dollar assets was mainly due to a decrease in bank borrowings and reductions in placements by other government funds, which were partly offset by an 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 2001 was HK$229.7 billion, an increase of HK$4.0 billion, or 1.8%, from the end of November 2001. The increase was mainly due to an increase in Certificates of Indebtedness of HK$4.0 billion during the month, which reflected a rise in demand for cash ahead of the seasonal holidays.

The backing assets increased by HK$3.9 billion, or 1.6%, from HK$252.6 billion to HK$256.5 billion. The rise was mainly driven by the corresponding increase in Certificates of Indebtedness in the monetary base. At the end of December, the backing ratio stood at 111.68%, compared to 111.91% at the end of November.

Attachment

Annex 1 : Abridged Balance Sheet of the Exchange Fund
Annex 2 : Currency Board Account

For further enquiries, please contact:

Jasmin Fung, Manager (Press), at 2878 8246 or
Thomas Chan, Senior Manager (Press), at 2878 1480

Hong Kong Monetary Authority
25 January 2002

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 January 2002, the scheduled dates for issuing the press releases are as follows: