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

Hong Kong Exchange Fund Amounts to US$282.26 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

March 31, 2010 - Total assets of the Hong Kong Exchange Fund amounted to HK$2,201.7 billion (US$282.26 billion) on February 28, 2010. This is HK$3.9 billion (US$500 million) lower than at the end of January 2010, according to the Hong Kong Monetary Authority.

Foreign currency assets decreased by HK$1.2 billion (US$153.84 million) while Hong Kong dollar assets decreased by HK$2.7 billion (US$346.15 million).

The decline in foreign currency assets is mainly due to a decrease in unsettled purchases of securities, which was partly offset by an increase in Certificates of Indebtedness. The decline in Hong Kong dollar assets is mainly due to fiscal drawdowns, which was partly offset by valuation gains on Hong Kong equities.

The Currency Board Account shows that the Monetary Base at the end of February 2010 was HK$1,028.3 billion (US$131.83 billion), an increase of HK$6 billion (US$769.23 million), or 0.6%, from the end of January 2010. The rise in the Monetary Base is mainly due to an increase in Certificates of Indebtedness reflecting the seasonal demand for banknotes around the Lunar New Year.

The Backing Assets increased by HK$5.6 billion (US$717.94 million), or 0.5%, to HK$1,102.4 billion (US$141.33 billion). The increase was attributable mainly to the rise in the Monetary Base together with interest from investments. These changes were partly offset by revaluation losses. The backing ratio decreased from 107.29% at the end of January 2010 to 107.21% at the end of February 2010.