The Exchange Fund's total assets fell $12.5 billion to $1.0526 trillion at the end of October. Both foreign currency assets and Hong Kong dollar assets dropped $5.8 billion and $6.7 billion respectively, the Monetary Authority says.

The decrease in foreign currency assets was due mainly to a drop in Certificates of Indebtedness and valuation losses on foreign currency investments, which were partly offset by income from foreign currency assets and a rise in repurchase agreements outstanding.

The drop in Hong Kong dollar assets was due mainly to a decrease in bank borrowings and valuation losses in the market value of Hong Kong equities held by the Exchange Fund, which were partly offset by placements received from fiscal reserves.

The Monetary Base stood at $278.2 billion, down $2.5 billion, or 0.9%, from September. The decrease was due mainly to a fall in Certificates of Indebtedness.

Backing Assets dropped $2.3 billion, or 0.7%, to $309.6 billion. The decrease was attributable mainly to the corresponding decrease in Certificates of Indebtedness in the Monetary Base, which was partly offset by net income from investments.