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Exchange Fund at end-1994 stands at $408 billion
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In a statement to the Legislative Council today (Wednesday) the Financial Secretary, Sir Hamish Macleod, announced that the Exchange Fund stood at HK$408 billion at end-1994.
According to the unaudited figures, total assets of the Fund were up 17 per cent from HK$348 billion at end-1993. Of the total, HK$384 billion (US$49 billion) were denominated in foreign currencies, placing Hong Kong seventh in the world in overall foreign exchange reserves and second in the world in reserves per capita.
These reserves are equivalent to more than nine months retained imports of goods and five times the size of Hong Kong's note issue.
"The continued strength of the Fund gives added credibility to our long-standing commitment to defend the currency and its link with the US dollar," Sir Hamish said.
The accumulated earnings of the Fund increased by just over HK$1 billion to about HK$129 billion at end-1994, according to the unaudited figures.
Prevailing market conditions in bond markets of the world last year were very unfavourable for holders of fixed income assets.
The Fund, as a large net holder of assets, was not immune to this adverse investment climate.
However, the Hong Kong Monetary Authority (HKMA) took action to reset the Fund to a very defensive stance early in 1994 and this enabled the Fund to avoid the worst effects of the fall in markets.
"By careful defensive positioning we have managed not only to preserve 1993's exceptional gains but also to add to those gains," said Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority (HKMA).
"We are satisfied with the results."
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