The Monetary Authority announced that at the end of December the Exchange Fund's total assets stood at $1.06 trillion, $11.9 billion lower than the month before.

Both foreign currency assets and Hong Kong dollar assets decreased, by $10.9 billion and $1 billion.

The authority said the decrease in foreign-currency assets was mainly due to a decrease in securities purchase but settled in the following month.  

The decrease was partly offset by an increase in certificates of indebtedness, valuation gains on foreign-currency investments, income from foreign-currency assets and purchases of foreign currencies with Hong Kong dollars. 

The decrease in Hong Kong dollar assets was mainly due to fiscal drawdowns and the sale of Hong Kong dollars for foreign currencies, which were partly offset by increases in bank borrowings and in the balance of the banking system.

Monetary base stood at $295b

The Currency Board Account shows that the monetary base at the end of December was $294.9 billion, an increase of $6.5 billion, or 2.3%, from the end of November. 

The rise was mainly due to increases in the aggregate balance and in certificates of indebtedness.

The backing assets increased by $6.8 billion, or 2.1%, to $327.3 billion. The rise was mainly attributable to the corresponding increases in the aggregate balance and in certificates of indebtedness in the monetary base together with income from investments.