The Exchange Fund's total assets amounted to $1.29 trillion on August 31, up $10.5 billion on July, the Monetary Authority says.

Foreign currency assets rose $10.9 billion while Hong Kong dollar assets fell by $400 million.

The rise in foreign currency assets was mainly due to interest and dividend income from foreign currency assets and a surge in securities purchased but settled in the following month.

The fall in Hong Kong dollar assets was mainly due to a drop in Exchange Fund Bills and Notes issued but not yet settled and fiscal drawdowns, which were partly offset by valuation gains of Hong Kong equities held by the Exchange Fund.

The Monetary Base at the end of August was $298.1 billion, up $1.3 billion or 0.4% on July. The rise was mainly due to rises in Certificates of Indebtedness and market value of Exchange Fund Bills and Notes outstanding.

Backing Assets fell $4.7 billion or 1.4% to $328.9 billion. The fall was attributable mainly 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 in the Monetary Base, interest from investments and revaluation gains.

Reflecting this, the backing ratio fell to 110.32% in August, from 112.39% in July.