Exchange Fund assets plunge 37.1% to $2t

And Hong Kong dollar assets alone decreased by $22.3 billion.

According to a release, the total assets of the Exchange Fund amounted to $2.4156 trillion at the end of September, down $37.1 billion on the end of August, the Monetary Authority announced.

Foreign currency assets dropped by $14.8 billion and Hong Kong dollar assets decreased by $22.3 billion.

The decline in foreign currency assets was mainly due to valuation losses on foreign currency investments. The decrease was partly offset by an increase in Certificates of Indebtedness, purchases of foreign currencies with Hong Kong dollars, and interest and dividend income from foreign currency investments.

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.

The Currency Board Account shows the Monetary Base at the end of September was $1.0618 trillion, up $6.7 billion, or 0.6%, on the end of August. The rise was mainly due to an increase in Certificates of Indebtedness.

Backing Assets rose $8.3 billion, or 0.7%, to $1.1578 trillion, mainly attributable to the issuance of Certificates of Indebtedness together with revaluation gains and interest from investments.

The backing ratio increased from 108.95% at the end of August to 109.04% at the end of September.