Foreign currency reserves increase
The Hong Kong Monetary Authority announced that the official foreign currency reserve assets of Hong Kong amounted to US$320.2 billion at end-May, compared to US$317.7 billion at end-March. There were no unsettled foreign exchange contracts both at end-May and end-April.
The total foreign currency reserve assets of US$320.2 billion represent over seven times the currency in circulation or about 50% of Hong Kong dollar M3.
Exchange Fund rises to US$391 billion
The total assets of the Exchange Fund amounted to US$391 billion at end-April, US$5.8 billion higher than that at end-March, the Hong Kong Monetary Authority said. Foreign currency assets increased by US$3.6 billion and Hong Kong dollar assets increased by US$2.2 billion.
The rise in foreign currency assets was mainly due to an increase in unsettled purchases of securities, valuation gains on foreign currency investments and an increase in foreign currency assets connected with the issuance of Certificates of Indebtedness. The rise in Hong Kong dollar assets was mainly due to placements received from fiscal reserves and Hong Kong Special Administrative Region Government funds and statutory bodies.
The Currency Board Account shows that the Monetary Base at end-April was US$161.37 billion, increased by US$384 million, or 0.2%, from end-March. The rise was due to an increase in the outstanding amount of Certificates of Indebtedness.
The amount of Backing Assets increased by US$358 million, or 0.2%, to US$173.5 billion. The rise was attributable to an increase in assets connected with the issuance of additional Certificates of Indebtedness. The backing ratio decreased from 107.58% at end-March to 107.54% at end-April.