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The Hong Kong Monetary Authority (HKMA) announced that the official foreign currency assets of Hong Kong were US$92.1 billion at the end of August 1998. (End-July: US$96.5 billion). In terms of foreign currency reserves ranking, Hong Kong remains the third largest in the world, after Japan and Mainland China (Table 1).
"The fall in foreign currency assets can be attributed to both fiscal drawdowns by the Government Treasury and the Government's counter activities in the stock and futures markets," said a HKMA spokesman.
The foreign currency assets of Hong Kong are held in the Exchange Fund and the Land Fund. As at the end of August, the foreign currency assets held in the Exchange Fund were US$73.4 billion (end-July: US$77.8 billion) and in the Land Fund were US$ 18.7 billion (end-July: US$18.7 billion).
The total foreign currency assets of US$ 92.1 billion represent about eight times the currency in circulation or about 40% of Hong Kong dollar M3, one of the highest ratio in the world.
Including unsettled foreign exchange contracts, the foreign currency assets held in the Exchange Fund and the Land Fund were US$69 billion (end-July: US$77.3 billion) and US$18.6 billion (end-July: US$18.7 billion) respectively (Table 2 and 3). Some US$4.4 billion in the Exchange Fund was sold on the last two trading days in August (28 and 31 August) for "value spot", that is, for settlement in two days on 1 September and 2 September respectively to fund the investment in Hong Kong stocks.
Table 1
Foreign Currency Reserves Ranking
US$ billion As at end of
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(1) Japan 209.3 Aug 1998
(2) China 140.6 July 1998
(3) Hong Kong 92.1* Aug 1998
(4) Taiwan 83.6 July 1998
(5) Germany 83.5 July 1998
(6) US 72.9 July 1998
(7) Brazil 71.5 May 1998
(8) Singapore 69.3 July 1998
(9) Spain 68.7 July 1998
(10) Italy 45.6 July 1998
Source: HKMA, IMF, Reuters
* Detailed breakdown at Tables 2 and 3.
Table 2
Exchange Fund Foreign Currency Assets
(US$ billion)
Excluding Including
Unsettled Unsettled Unsettled
FX Contracts FX Contracts FX Contracts
------------ ------------ ------------
March 95 52.4 (0.2) 52.2
June 95 53.6 - 53.6
September 95 51.8 2.8 54.6
December 95 55.4 1.8 57.2
March 96 58.1 1.7 59.8
June 96 57.3 2.7 60.0
September 96 55.4 6.7 62.1
December 96 63.8 5.7 69.9
February 97 63.8 4.3 68.1
March 97 63.4 4.3 67.7
April 97 63.6 4.0 67.6
May 97 66.6 1.8 68.4
June 97 67.6 2.1 69.7
July 97 66.1 2.5 68.6
August 97 69.5 0.1 69.6
September 97 71.4 0.3 71.7
October 97 74.0 0.4 74.4
November 97 79.1 0.4 79.5
December 97 75.3 0.3 75.6
January 98 80.3 - 80.3
February 98 78.6 - 78.6
March 98 78.5 0.1 78.6
April 98 77.7 - 77.7
May 98 77.9 - 77.9
June 98 77.9 - 77.9
July 98 77.8 (0.5) 77.3
August 98 73.4 (4.4)* 69.0
* This arises from "spot" transactions ( that is,
settlement in two days) done at the end of August for
settlement at the beginning of September.
Table 3
Land Fund Foreign Currency Assets
(US$ billion)
Excluding Including
Unsettled Unsettled Unsettled
FX Contracts FX Contracts FX Contracts
------------ ------------ ------------
July 1997 15.6 0.1 15.7
August 1997 15.8 0.1 15.9
September 1997 16.7 0.4 17.1
October 1997 17.4 (0.1) 17.3
November 1997 17.4 - 17.4
December 1997 17.5 0.1 17.6
January 1998 17.8 - 17.8
February 1998 18.1 - 18.1
March 1998 18.3 - 18.3
April 1998 18.5 (0.1) 18.4
May 1998 18.5 - 18.5
June 1998 18.6 - 18.6
July 1998 18.7 - 18.7
August 1998 18.7 (0.1) 18.6
Note: The Land Fund was established on 1 July 1997.
Figures prior to that date are therefore not available.
End/Monday, September 21 , 1998
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