Exchange Fund totals US$180.32 billion
Assets of the Hong Kong Exchange Fund amounted to US$180.32 billion on July 31. This is US$346.15 million lower than at the end of June 2008, according to the Hong Kong Monetary Authority.
Foreign currency assets increased by US$512.82 million, while Hong Kong dollar assets decreased by US$858.97 million.
The rise in foreign currency assets is due mainly to interest and dividend income from foreign currency assets and to an increase in securities purchased but settled in the following month. These increases were partly offset by redemption of Certificates of Indebtedness.
The decline in Hong Kong dollar assets is due mainly to fiscal drawdowns and a decrease in Exchange Fund Bills and Notes issued but not yet settled, which were partly offset by valuation gains on Hong Kong equities held by the Exchange Fund and by an increase in bank borrowings.
The Currency Board Account shows that the Monetary Base at the end of July 2008 was US$41.57 billion, a decrease of US$243.58 million, or 0.6%, from the end of June 2008. The decline is due mainly to a decrease in Certificates of Indebtedness.
The Backing Assets decreased by US$89.74 million, or 0.2%, to US$45.96 billion. The decrease is attributable mainly to the redemption of Certificates of Indebtedness in the Monetary Base, which was partly offset by revaluation gains and interest from investments. Reflecting this, the backing ratio rose from 110.14% at the end of June 2008 to 110.56% at the end of July 2008.
US$3.1 billion deficit recorded after 4 months
The Hong Kong Special Administrative Region Government (HKSARG) had expenditures of US$10.83 billion and revenue of US$7.73 billion for the period April-July 2008, resulting in a deficit of US$3.1 billion.
A HKSARG spokesman said that the deficit for the period was mainly because some major revenue items, including salaries and profits taxes, were mostly received toward the end of a financial year.
The territory’s fiscal reserves stood at US$60.08 billion as of July 31, 2008.
Foreign currency reserves at US$158.1 billion
Hong Kong’s foreign currency reserves stood at US$158.1 billion at the end of August 2008, according to the Hong Kong Monetary Authority, compared to US$157.7 billion at end-July 2008.
Including unsettled forward contracts, the foreign currency reserve assets of Hong Kong at the end of August 2008 also stood at US$158.1 billion, compared to US$157.7 billion at end-July.
Hong Kong is the world’s ninth largest holder of foreign currency reserves based on the latest published figures, after mainland China, Japan, Russia, India, Taiwan, Korea, Brazil and Singapore.
The total foreign currency reserve assets of US$158.1 billion represent more than seven times the currency in circulation or about 40% of Hong Kong dollar M3.
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