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


Hong Kong Exchange Fund Amounts to US$275.85 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

January 29, 2010 - Total assets of the Hong Kong Exchange Fund amounted to HK$2,151.7 billion (US$275.85 billion) on December 31, 2009. This is HK$83.7 billion (US$10.73 billion) lower than at the end of November 2009, according to the Hong Kong Monetary Authority (HKMA).

Foreign currency assets decreased by HK$83.8 billion (US$10.74 billion) while Hong Kong dollar assets increased by HK$0.1 billion (US$12.82 million).

The decline in foreign currency assets was due mainly to a decrease in unsettled purchases of securities and valuation losses on foreign currency investments. These decreases were partly offset by purchases of foreign currencies with Hong Kong dollars and an increase in Certificates of Indebtedness. The rise in Hong Kong dollar assets was due mainly to valuation gains on Hong Kong equities.

The Currency Board Account shows that the Monetary Base at the end of December 2009 was HK$1,010.7 billion (US$129.57 billion), an increase of HK$14.6 billion (US$1.87 billion), or 1.5%, from the end of November 2009. The rise in the Monetary Base was due mainly to an inflow of funds into the Hong Kong dollar and an increase in Certificates of Indebtedness. The latter reflected the seasonal demand for banknotes around Christmas and New Year.

The Backing Assets increased by HK$11.7 billion (US$1.5 billion), or 1.1%, to HK$1,081.1 billion (US$138.6 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. Reflecting this, the backing ratio decreased from 107.36% at the end of November 2009 to 106.96% at the end of December 2009.