The Exchange Fund total assets rose $3.9 billion from July to $1.06 trillion at the end of August, the Monetary Authority says.

Foreign currency assets grew $2.4 billion while Hong Kong dollar assets rose by $1.5 billion.

The increase in foreign currency assets was due mainly to valuation gains on foreign currency investments and income from foreign currency assets, which was partly offset by decreases in Certificates of Indebtedness and repurchase agreements outstanding.

The increase in Hong Kong dollar assets was due mainly to an increase in bank borrowings, which was partly offset by fiscal drawdowns.

The Monetary Base at the end of August was $277.6 billion, down $1.7 billion, or 0.6%, over a month earlier. The decrease was due mainly to a decrease in Certificates of Indebtedness.

The Backing Assets went down $600 million, or 0.2%, to $309.2 billion. The decrease was attributable mainly to the corresponding decrease in Certificates of Indebtedness in the Monetary Base which was partly offset by income from investments and revaluation gains. Reflecting this, the backing ratio increased to 111.36% from 110.88% at the end of July.