|
(Chapter 4: Financial and Monetary
Affairs)
| Exchange Fund Balance Sheet |
| $ Million |
 |
| |
|
As at end of year |
|
 |
|
|
|
|
|
1998 |
|
2002 |
|
2003 |
|
|
| |
|
|
|
|
|
|
| Assests(1) |
|
|
|
|
|
|
| |
Foreign currency assets |
701,239 |
|
891,632 |
|
929,625 |
|
| |
Hong Kong dollar assets |
211,036 |
|
63,433 |
|
82,020 |
|
| |
|
|
|
|
|
|
|
| |
|
912,275 |
|
955,065 |
|
1,011,645 |
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Liabilities(1) |
|
|
|
|
|
|
| |
Certificates of Indebtedness(2) |
86,465 |
|
118,475 |
|
134,215 |
|
| |
Government issued currency notes
and coins in circulation |
5,778 |
|
5,891 |
|
6,297 |
|
| |
Balance of the banking system(3) |
2,527 |
|
525 |
|
28,277 |
|
| |
Exchange Fund Bills and Notes |
98,334 |
|
122,925 |
|
123,520 |
|
| |
Placements by other HKSAR government
funds(4) |
424,562 |
|
301,669 |
|
252,296 |
|
| |
Other liabilities(5) |
52,364 |
|
78,406 |
|
82,161 |
|
| |
|
|
|
|
|
|
|
| |
|
670,030 |
|
627,891 |
|
626,766 |
|
| |
|
|
|
|
|
|
|
| Accumulated Surplus |
242,245 |
|
327,174 |
|
384,879 |
|
| |
 |
|
|
|
|
|
|
Notes: |
|
(1) |
|
(a) |
Investment
The Fund is invested in interest-bearing placements
with banks and other financial institutions both in
Hong Kong and outside Hong Kong and in a variety of
financial instruments, including bonds, notes, treasury
bills and equities. |
|
(b) |
Foreign currency assets distribution
A large proportion of the Fund's foreign currency assets
is held in US dollars. Apart from US dollar assets,
the Fund also holds assets denominated in fully convertible
foreign currencies. |
|
(c) |
Location of assets
The assets are held in deposit, trustee and safe-keeping
accounts with banks, central banks and custodial organisations
situated in Hong Kong and other major financial centres. |
|
(d) |
Valuation of assets and liabilities
Debt securities, equities and Exchange Fund Bills and
Notes are valued in the accounts at market value at
the balance sheet date. Placements with banks and other
financial institutions, certificates of deposit, consideration
received or paid under repurchase and resale agreements,
securities lending agreements, placements by banks and
other financial institutions, placements by other HKSAR
government funds for which interest is payable at market-based
rates and placements by Hong Kong statutory bodies are
valued according to a price matrix of discounted cash
flows using applicable interest rates for discounting.
The consequential change in value of the asset or liability
is reflected in the carrying value of the relevant asset
or liability in the Balance Sheet except in the case
of placements by other HKSAR government funds for which
interest is payable at market-based rates, which are
stated in the Balance Sheet at the principal amounts
payable at the balance sheet date with the revaluation
differences included in other liabilities. Placements
by other HKSAR government funds for which interest is
payable at rates determined by reference to the investment
income of the Fund are stated at the principal amounts
payable at the balance sheet date. |
|
(e) |
Translation of foreign currency assets
and liabilities
Assets and liabilities denominated in foreign currencies
are translated into Hong Kong dollars at the rates of
exchange ruling at the balance sheet date. Exchange
gains and losses on foreign currency translation are
included in the Income and Expenditure Account. Certificates
of Indebtedness, government-issued currency notes and
coins in circulation, all of which are denominated in
Hong Kong dollars but are issued and redeemed in US
dollars at the linked exchange rate of US$1=$7.80, are
stated in the accounts at their Hong Kong dollar face
value. At the balance sheet date the difference between
their Hong Kong dollar face value and the market value
of the US dollars required for their redemption is included
in other assets. |
|
|
(2) |
As backing for the bank note issues, each
note-issuing bank is required to hold a non-interest bearing
Certificate of Indebtedness issued by the Financial Secretary.
Payments for the issuance and redemption of notes against
these Certificates are made in US dollars at the fixed rate
of US$1=HK$7.80. |
|
(3) |
Under the interbank payment system based
on Real Time Gross Settlement principles, all licensed banks
maintain a Hong Kong dollars clearing account with the Hong
Kong Monetary Authority for the account of the Exchange Fund.
The aggregate balance in these accounts represents the total
level of liquidity in the interbank market. |
|
(4) |
These represent placements by other HKSAR
government funds with the Exchange Fund. Until 31 March 1998,
all placements by other HKSAR government funds bore interest
at market-based rates. With effect from 1 April 1998, the
basis of interest payable on certain placements by other HKSAR
government funds was amended from market-based rates to rates
determined by reference to the investment income of the Fund. |
|
(5) |
Other liabilities include placements by banks
and other financial institutions, placements by Hong Kong
statutory bodies, interest payable on Exchange Fund Notes
and placements by other HKSAR government funds, revaluation
losses on off-balance sheet items which are marked to market,
other accrued expenses and provisions and the revaluation
differences of placements by other HKSAR government funds
for which interest is payable at market-based rates. |
|
|
|
|
|
Source: |
Hong Kong Monetary Authority.
(Enquiry Telephone No.: 2878 8222) |
|
