Hong Kong Exchange Fund Totals US$238.96 Billion

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Daniel McAtee at 202-238-6360
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Wing Yan Tong at 415-835-9315

August 28, 2009 - Total assets of the Hong Kong Exchange Fund amounted to HK$1,863.9 billion (US$238.96 billion) on July 31, 2009. This is HK$30.7 billion (US$3.93 billion) higher than at the end of June 2009, according to the Hong Kong Monetary Authority.

Foreign currency assets increased by HK$39.1 billion (US$5.01 billion) while Hong Kong dollar assets decreased by HK$8.4 billion (US$1.07 billion).

The rise in foreign currency assets was due mainly to purchases of foreign currencies with Hong Kong dollars and valuation gains on foreign currency investments. These increases were partly offset by a decrease in securities purchased but settled in the following month.

The decline in Hong Kong dollar assets was due mainly to a decrease in Exchange Fund Bills and Notes issued but not yet settled and fiscal drawdowns, which were partly offset by valuation gains on Hong Kong equities held by the Exchange Fund and an increase in bank borrowings.

The Currency Board Account shows that the Monetary Base at the end of July 2009 was HK$770.7 billion (US$98.8 billion), an increase of HK$66 billion (US$8.46 billion), or 9.4%, from the end of June 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 HK$66.4 billion (US$8.51 billion), or 8.9%, to HK$814.3 billion (US$104.39 billion). The increase was attributable mainly to the rise in the Monetary Base together with interest from investments. At the end of July 2009, the backing ratio stood at 105.65%, compared with 106.13% at the end of June 2009.