Exchange Fund total assets amounted to $1.03 trillion in August, $18 billion higher than in July. Both foreign currency assets and Hong Kong dollar assets increased, by $10.5 billion and $7.5 billion.

The increase in foreign currency assets was mainly due to income from foreign currency assets, valuation gains on foreign currency investments and an increase in securities purchased but settled in the following month, which were partly offset by sale of foreign currencies for Hong Kong dollars.

The increase in Hong Kong dollar assets was mainly due to an increase in bank borrowings, the purchase of Hong Kong dollars from foreign currencies and valuation gains in the market value of Hong Kong equities held by the Exchange Fund. These increases were partly offset by fiscal drawdowns and a decrease in the balance of the banking system.

The Monetary Base stood at $277.7 billion, a dip of $3.3 billion, or 1.2%, from July. The drop was mainly due to a decrease in the Aggregate Balance, which was partly offset by an increase of $0.7 billion in the market value of Exchange Fund Bills and Notes outstanding.

The Backing Assets fell $3.3 billion, or 1%, to $311 billion. This was mainly driven by the corresponding decrease in the Aggregate Balance in the Monetary Base, which was partly offset by income from investments and revaluation gains.