Foreign currency reserves rise
Hong Kong’s official foreign currency reserve assets reached US$317.8 billion at the end of April, up from US$316.9 billion at the end of March, according to the Hong Kong Monetary Authority (HKMA). There were no unsettled foreign exchange contracts at either end-April or end-March.
The total foreign currency reserve assets of US$317.8 billion represent more than seven times the currency in circulation or about 51% of Hong Kong dollar M3.
Exchange Fund assets decrease
Total assets of the Exchange Fund amounted to US$385.15 billion at March 31, US$1.62 billion lower than that at the end of February, according to the Hong Kong Monetary Authority (HKMA).
Foreign currency assets decreased by US$128.2 million and Hong Kong dollar assets decreased by US$1.5 billion.
The decline in foreign currency assets was mainly due to valuation losses on investments and a decrease in assets connected with the redemption of Certificates of Indebtedness. These decreases were partly offset by interest and dividend income from foreign currency assets. The decline in Hong Kong dollar assets was mainly due to valuation losses on equities and fiscal drawdowns.
The Currency Board Account shows that the Monetary Base at the end of March was US$160.98 billion, decreased by US$269.2 million, or 0.2%, from the end of February. The decline was due to a decrease in the outstanding amount of Certificates of Indebtedness.
The amount of backing assets decreased by US$448.7 million, or 0.3%, to US$173.19 billion. The decrease was attributable to the reduction in assets connected with the redemption of certificates of indebtedness and revaluation losses. The backing ratio decreased from 107.68% at the end of February to 107.58% at the end of March.