Exchange Fund assets amount to $2,505B in January

The Hong Kong Monetary Authority announced that the total assets of the Exchange Fund amounted to HK$2,505.0 billion as at January 31, 2011. It is HK$159.3 billion higher than at the end of December 2010.

Foreign currency assets increased by HK$126.9 billion and Hong Kong dollar assets increased by HK$32.4 billion.

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

The rise in foreign currency assets was mainly due to increases in unsettled purchases of securities and Certificates of Indebtedness, and valuation gains on foreign currency investments. The rise in Hong Kong dollar assets was mainly due to placements received from fiscal reserves.

     The Currency Board Account shows that the Monetary Base at the end of January 2011 was HK$1,064.2 billion, an increase of HK$24.7 billion, or 2.4 per cent, from the end of December 2010. The rise was mainly due to an increase in Certificates of Indebtedness which reflected the seasonal demand for banknotes towards Lunar New Year.

     The Backing Assets increased by HK$27.7 billion, or 2.5 per cent, to HK$1,148.8 billion. The increase was mainly attributable to the issuance of Certificates of Indebtedness and exchange gain triggered by a stronger US dollar. The backing ratio increased from 107.85% at the end of December 2010 to 107.95 per cent at the end of January 2011.