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$1,018.8 billion at 30 September 2004.

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

At the end of September 2004, the total assets of the Exchange Fund, at HK$1,018.8 billion, were HK$11.1 billion lower than at the end of August 2004. Both foreign currency assets and Hong Kong dollar assets decreased, by HK$9.2 billion and HK$1.9 billion respectively.

The decrease in foreign currency assets was mainly due to sales of foreign currencies for Hong Kong dollars and a decrease in securities purchased but settled in the following month. These decreases were partly offset by an increase in Certificates of Indebtedness and exchange gains on foreign currency investments. The decrease in Hong Kong dollar assets was mainly due to fiscal drawdowns and a decrease in the balance of the banking system. These decreases were partly offset by the purchase of Hong Kong dollars from foreign currencies and valuation gains in the market value of Hong Kong equities held by the Exchange Fund.

The Currency Board Account shows that the Monetary Base at the end of September 2004 was HK$278.7 billion, an increase of HK$1.0 billion, or 0.4%, from the end of August 2004. The increase was mainly due to an increase in Certificates of Indebtedness which was partly offset by a decrease in the Aggregate Balance.

The Backing Assets increased by HK$0.9 billion, or 0.3%, to HK$311.9 billion. The increase was mainly attributable to the corresponding increase in Certificates of Indebtedness in the Monetary Base and income from investments, which were partly offset by a decrease in the Aggregate Balance. At the end of September, the backing ratio stood at 111.91%, compared with 111.97% at the end of August.

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
29 October 2004

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 October 2004, the scheduled dates for issuing the press releases are as follows: