The Exchange Fund's total assets rose $51.4 billion since December, to $1.23 trillion at the end of January, the Monetary Authority says.

Foreign currency assets rose $20.1 billion and Hong Kong dollar assets surged $31.3 billion.

The rise in foreign currency assets was due mainly to increases in securities purchased but settled in the following month, Certificates of Indebtedness, and income from foreign currency assets. The rise in Hong Kong dollar assets was due mainly to placements received from fiscal reserves, which was partly offset by a decrease in bank borrowings.

The Currency Board Account shows the Monetary Base at the end of January was $300 billion, up $2.1 billion, or 0.7%, from last December. The rise was due mainly to increases in Certificates of Indebtedness and Government-issued currency notes, which were partly offset by a decrease in the market value of Exchange Fund Bills and Notes outstanding.

The Backing Assets fell $3.1 billion, or 0.9%, to $329.5 billion. The drop was mainly attributable to the transfer of assets out of the Backing Portfolio to the Investment Portfolio in accordance with the arrangement approved by the Exchange Fund Advisory Committee.

The decline was partly offset by the issuance of Certificates of Indebtedness and Government-issued currency notes in the Monetary Base, interest from investments, and revaluation gains.

Reflecting this, the backing ratio declined from 111.65% at the end of December to 109.83% at the end of January.