Hong Kong’s Exchange Fund assets plunge $38b in August

The Monetary Authority announced that total assets of the Exchange Fund amounted to a whopping $2.45t at the end of the month.

Foreign currency assets dropped $19.8 billion and Hong Kong dollar assets shrunk by $18.5 billion.

The decline in foreign currency assets was mainly due to a decrease in unsettled purchases of securities, which was partly offset by purchases of foreign currencies with Hong Kong dollars. The decline in Hong Kong dollar assets was mainly due to valuation losses on Hong Kong equities and sales of Hong Kong dollars for foreign currencies. These decreases were partly offset by placements received from fiscal reserves, Government funds and statutory bodies.

The Currency Board Account shows the Monetary Base at the end of August was about $1.055 trillion, a decrease of $1 billion, or 0.1%, on July. The decline was mainly due to a decrease in Certificates of Indebtedness.