The Exchange Fund's total assets amounted to $1,011.2 billion at December 31, $16.8 billion higher than in November, the Monetary Authority says.

Foreign currency assets rose by $21.8 billion while Hong Kong dollar assets fell by $5 billion.

The rise in foreign currency assets was mainly due to the purchase of foreign currencies with Hong Kong dollars and an increase in Certificates of Indebtedness.

The fall in Hong Kong dollar assets was mainly due to the sale of Hong Kong dollars in exchange for foreign currencies and a decrease in bank borrowings. These falls were partly offset by an increase in the balance of the banking system and placements received from fiscal reserves.

The Currency Board Account shows that the Monetary Base at the end of December was $292.7 billion, up $23.8 billion, or 8.9%, on November. The increase was mainly due to increases in Certificates of Indebtedness and in the Aggregate Balance.

Backing Assets rose by $23.8 billion, or 8%, to $322.1 billion. The increase was mainly attributable to the corresponding increases in Certificates of Indebtedness and the Aggregate Balance in the Monetary Base. At the end of December, the backing ratio stood at 110.05%, compared with 110.95% at the end of November.

While the increases in the Backing Assets and the Monetary Base were virtually matched in magnitude, the proportionate increase in the former is smaller than the latter. The backing ratio, therefore, fell to 110.05% at the end of December, compared with 110.95% a month ago.