US$1.02 billion surplus recorded in October

The Hong Kong Special Administrative Region Government announced its financial results for the seven months ended October 31, 2009 with a surplus of US$1.02 billion recorded in the month of October, thereby reducing the deficit for the seven months ended October 31 to US$7.28 billion.  Expenditure for the period amounted to US$20.7 billion and revenue of HK$104.7 billion.

A government spokesman said that the improved financial results in October were mainly due to the collection of profits tax.

The fiscal reserves stood at US$56.1 billion as of October 31.

Exchange Fund totals US$261.32 billion

Total assets of the Hong Kong Exchange Fund amounted to US$261.32 billion on October 31. This is US$10.25 billion higher than at the end of September 2009, according to the Hong Kong Monetary Authority.

Foreign currency assets increased by US$9.65 billion and Hong Kong dollar assets increased by US$602.56 million.

The rise in foreign currency assets was due mainly to purchases of foreign currencies with Hong Kong dollars, which was partly offset by a decrease in securities purchased but settled in the following month.  

The rise in Hong Kong dollar assets was due mainly to valuation gain on Hong Kong equities.

The Currency Board Account shows that the Monetary Base at the end of October 2009 was US$114.28 billion, an increase of US$11.25 billion, or 10.9%, from the end of September 2009.  The rise in the Monetary Base was due mainly to an inflow of funds into the Hong Kong dollar.

The Backing Assets increased by US$11.26 billion, or 10.3%, to US$120.24 billion.  The increase was attributable mainly to the rise in the Monetary Base together with interest from investments.  These increases were partly offset by revaluation losses.  At the end of October 2009, the backing ratio stood at 105.21%, compared with 105.77% at the end of September 2009.

Foreign currency reserves at US$256.3 billion

Hong Kong’s foreign currency reserve assets amounted to US$256.3 billion at the end of November 2009, according to the Hong Kong Monetary Authority, compared to US$240.1 billion at end-October 2009.

Including unsettled forward contracts, the foreign currency reserve assets of Hong Kong at the end of November 2009 also stood at US$256.3 billion, compared to US$240.1 billion at end-October 2009.

Hong Kong is the world’s seventh largest holder of foreign currency reserves based on the latest published figures, after Mainland China, Japan, Russia, Taiwan, India and Korea.

The total foreign currency reserve assets of US$256.3 billion represent about ten times the currency in circulation or 55% of Hong Kong dollar M3.