HKs exchange fund assets grows by $16.9 bln in 2008

HONG KONG, Jan. 23 (Xinhua) -- Hong Kong's total exchange fund assets topped 1.557 trillion HK dollars (201 billion U.S. dollars) at the end of last year, 131.6 billion HK dollars (16.9 billion U.S. dollars) more than that at the end of last November, revealed the Monetary Authority (HKMA) here Friday.

Foreign-currency assets rose 129.9 billion HK dollars (16.76 billion U.S. dollars) in December and Hong Kong dollar assets increased by 1.7 billion HK dollars (219 million U.S. dollars).

The rise in foreign-currency assets was due mainly to purchases of foreign currencies with Hong Kong dollars and valuation gains on foreign-currency investments, said the HKMA, Hong Kong's de facto central bank.

The HKMA attributed the rise in Hong Kong dollar assets mainly to increases in the balance of the banking system and bank borrowings. These increases were substantially offset by the sale of Hong Kong dollars for foreign currencies and fiscal draw-downs.

The Monetary Base at the end of December was 506.6 billion HK dollars (65.37 billion U.S. dollars), up 21 percent from November, mainly due to increases in the Aggregate Balance and Certificates of Indebtedness among the seasonal demand for banknotes around Christmas and New Year holidays.

However, the Exchange Fund posted a record loss of 74.9 billion HK dollars (9.66 billion U.S. dollars) of its investment last year.

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