Hong Kong's Exchange Fund total assets decreased by HK$32.4 billion to HK$4,070.2 billion as of end-August, according to the Hong Kong Monetary Authority, attributed to the weak local currency during the month.
Foreign currency assets fell by HK$36.1 billion, mainly due to the sale of US dollars to maintain the currency peg. In contrast, Hong Kong dollar assets rose by HK$3.7 billion, driven by the market revaluation of Hong Kong equities.
The monetary base stood at HK$2.01 trillion by end-August, down 1.4 percent month-on-month, as a result of Hong Kong dollar purchases under the peg regime. This decline was partially offset by an increase in the total of Certificates of Indebtedness.
Total backing assets decreased by 3.5 percent to HK$2.2 trillion, with the backing ratio dropping to 109.78 percent.
HKMA data also showed that total deposits with authorized institutions increased by 0.9 percent in August.
Specifically, Hong Kong dollar deposits fell by 2.1 percent, while foreign currency deposits grew by 3.3 percent, largely reflecting corporate fund flows.
In the first eight months of the year, total deposits and Hong Kong dollar deposits rose by 8.7 percent and 2.6 percent, respectively.
Renminbi deposits in Hong Kong reached 968 billion yuan (HK$1.05 trillion) at the end of August, up 3.2 percent from the previous month. Meanwhile, the total remittance of renminbi for cross-border trade settlement was 996.9 billion yuan, down 19.2 percent month-on-month.
The HKMA noted that deposit fluctuations are influenced by various factors, including interest rate trends and market fundraising activities. It advised observing longer-term trends rather than overinterpreting month-to-month changes.
