Hong Kong's Latest Foreign Currency Assets Figures released

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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
                   -----------           ------------

(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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