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Total Assets of Hong Kong's Exchange Fund Reached HK983 billion by end of July
The total assets of the Exchange Fund was HK$982.8 billion as of July 31, 2000, the Hong Kong Monetary Authority (HKMA). This was a HK$26.6 billion increase from the end of June.
Both foreign currency assets and Hong Kong dollar assets increased by HK$16.4 billion and HK$10.2 billion respectively.
The increase in foreign currency assets was primarily attributed to the increase in amount of repurchase agreements outstanding at the end of the month. Under a repurchase agreement ("repo"), the Exchange Fund sells securities to a party and repurchases them at a pre-determined subsequent date and price. Standard accounting policies consider repo transactions as secured borrowings, which the cash received is accounted for as cash borrowed. The securities sold under the repo agreements still remain as assets on the balance sheet. Thus, both asset and liabilities of the balance sheet of the Exchange Fund have increased.
The increase in Hong Kong dollar assets also reflect an increase in the market value of Hong Kong equities.
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