The following is issued on behalf of the Hong Kong Monetary Authority:

Hong Kong Exchange Fund Totals US$246.1 Billion

For more information, please contact:
Melissa Ng / David Hsieh at 212-752-3320
Daniel McAtee at 202-238-6360
Wing Yan Tong at 415-835-9315

September 29, 2009 - Total assets of the Hong Kong Exchange Fund amounted to HK$1,919.6 billion (US$246.1 billion) on August 31, 2009. This is HK$55.7 billion (US$7.14 billion) higher than at the end of July 2009, according to the Hong Kong Monetary Authority (HKMA).

Foreign currency assets increased by HK$64.7 billion (US$8.29 billion) while Hong Kong dollar assets decreased by HK$9 billion (US$1.15 billion).

The rise in foreign currency assets was due mainly to an increase in securities purchased but settled in the following month, purchases of foreign currencies with Hong Kong dollars and valuation gains on foreign currency investments.

The decline in Hong Kong dollar assets was due mainly to fiscal drawdowns and valuation losses on Hong Kong equities held by the Exchange Fund, which were partly offset by an increase in bank borrowings.

The Currency Board Account shows that the Monetary Base at the end of August 2009 was HK$792.1 billion (US$101.55 billion), an increase of HK$21.4 billion (US$2.74 billion), or 2.78%, from the end of July 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$22.9 billion (US$2.93 billion), or 2.82%, to HK$837.2 billion (US$107.33 billion). The increase was attributable mainly to the rise in the Monetary Base together with revaluation gains and interest from investments. Reflecting this, the backing ratio increased from 105.65% at the end of July 2009 to 105.69% at the end of August 2009.