Exchange Fund assets decline to $4.11 trillion

Hong Kong's Exchange Fund, which is used to back the Hong Kong dollar, dropped HK$34.6 billion to HK$4.11 trillion at the end of October from one month ago, Hong Kong Monetary Authority said, as the government reported a fiscal deficit of HK$56.8 billion in the seven months ended in October.

Hong Kong dollar assets decreased by HK$92.6 billion, mainly due to the decrease in exchange fund bills and notes issued but not yet settled at month's end and mark-to-market revaluation of Hong Kong equities, while foreign currency assets increased by HK$58.0 billion.

In a separate statement, Hong Kong dollar deposits decreased by 0.9 percent, while yuan deposits in Hong Kong inched down 0.6 percent in October to 996.2 billion yuan (HK$1.09 trillion) at the end of October.

This came as the Hong Kong government said expenditure for the period April to October amounted to HK$438.9 billion while generating revenue of HK$292.4 billion.

The government said that the deficit for the period was mainly due to the fact that some major types of revenue including salaries and profits taxes are mostly received towards the end of a financial year.