Hong Kong’s Exchange Fund Foreign Assets Increase
In the latest development from Hong Kong Money Authority (HKMA), their Exchange Fund foreign assets are looking upward. The Hong Kong Monetary Authority publicized the Exchange Fund’s key analytical accounts today (February 14).
Foreign assets, representing the Exchange Fund’s external assets, rose by HK$115.2 billion to HK$3,617.7 billion during the month.
The Monetary Base within the Exchange Fund includes issued Exchange Fund Bills and Notes, Government-issued currency notes and coins in circulation, the Balance of the Banking System, and the Certificates of Indebtedness, which was HK$1,927.2 billion.
Other sections of the foreign assets include claims from Hong Kong’s private sector, which was HK$303.4 billion and foreign liabilities, which totalled HK$23.8 billion.
The Exchange Fund analytical accounts are the Central Bank’s Analytical Accounts under SDDS. They are made public in accordance with the Special Data Dissemination Standard (SDDS) of the International Monetary Fund.
Beginnings of Hong Kong Exchange Fund
HKMA’s Exchange Fund was established in 1935 as a backing to support Hong Kong’s banknotes. After several years, the Exchange fund plays additional roles, such as managing the official reserves.
It happened when the Government’s General Revenue Account consisting of the bulk of foreign currency assets and the Coinage Security assets, transferred them into the Exchange Fund. In 1976, the Exchange Fund began receiving fiscal reserves from the Hong Kong government.
Ever since the expansion of roles and assets, the Exchange Fund has diversified its investments considerably into a wide variety of asset classes, prudently and incrementally. The manner of investment began in 2008, and the Exchange Fund now manages its risks better and intensifies returns.
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