Foreign currency reserves at US$157.6 billion
Hong Kong’s foreign currency reserves stood at US$157.6 billion at end-June, according to the Hong Kong Monetary Authority, compared to US$159 billion a month earlier.
Including unsettled forward contracts, the foreign currency reserve assets of Hong Kong also stood at US$157.6 billion, compared to US$159 billion at end-May.
Hong Kong is the world’s ninth-largest holder of foreign currency reserves, after mainland China, Japan, Russia, India, Taiwan, South Korea, Brazil and Singapore.
The total foreign currency reserve assets represent more than seven times the currency in circulation, or approximately 39% of Hong Kong dollar M3.
Exchange Fund totals US$185.71 billion
Assets of the Hong Kong Exchange Fund amounted to US$185.71 billion on May 31. This is US$2.44 billion lower than at end-April, according to the Hong Kong Monetary Authority.
Foreign currency assets decreased US$743.58 million and Hong Kong dollar assets decreased US$1.7 billion.
The decline in foreign currency assets is due mainly to valuation losses on foreign currency investments, which were partially offset by interest and dividend income from foreign currency assets.
The decline in Hong Kong dollar assets is due mainly to valuation losses on Hong Kong equities held by the Exchange Fund and fiscal drawdowns.
The Currency Board Account shows the monetary base at end-May was US$41.69 billion, a 0.3% decrease of US$141.02 million from the previous month. The decline is due mainly to decreases in Certificates of Indebtedness and the market value of Exchange Fund bills and notes outstanding.
Backing assets decreased US$230.76 million, or 0.5%, to US$45.73 billion. The decrease is attributable mainly to the redemption of Certificates of Indebtedness in the monetary base and revaluation losses, which were partially offset by investment interest. Reflecting this, the backing ratio declined from 109.91% at end-April to 109.7% at end-May.
Financial year shows early deficit
The Hong Kong Special Administrative Region Government (HKSARG) had expenditures of US$4.96 billion and revenue of US$4.23 billion in April and May, the first two months of its financial year.
An HKSARG spokesman said the US$730.76 million deficit is not unusual, as some major revenue items, such as salaries and profits taxes, are mostly received toward the end of the financial year.
The territory’s fiscal reserves stood at US$62.46 billion as of May 31.
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