The Exchange Fund's total assets amounted to $1.417 trillion on December 31, up $6.3 billion on November's figure, the Monetary Authority says.

Foreign currency assets rose $17.3 billion and Hong Kong dollar assets fell by $11 billion.

The rise in foreign currency assets was mainly due to interest and dividend income from foreign currency assets, purchases of foreign currencies with Hong Kong dollars, and an increase in Certificates of Indebtedness. These increases were partly offset by valuation losses on foreign currency investments and a decrease in repurchase agreements outstanding.

The drop in Hong Kong dollar assets was mainly due to the sale of Hong Kong dollars for foreign currencies and valuation losses on Hong Kong equities held by the Exchange Fund, which were partly offset by placements received from fiscal reserves and an increase in Exchange Fund Bills and Notes issued but not yet settled.

The Currency Board Account shows the Monetary Base at the end of December was $320.2 billion, up $5.3 billion or 1.7%. The rise was due mainly to an increase in Certificates of Indebtedness reflecting seasonal demand for banknotes around the Christmas-New Year period. This was partly offset by a decrease in the market value of Exchange Fund Bills and Notes outstanding.

Backing Assets grew $7.8 billion or 2.2% to $357.4 billion. It was mainly attributable to the issuance of Certificates of Indebtedness in the Monetary Base, interest from investments and revaluation gains. Reflecting this the backing ratio rose from 110.98% at the end of November to 111.6% at the end of December.