The Exchange Fund's total assets rose to $1.426 trillion in September, up $22.4 billion on August. Foreign currency assets rose $21.1 billion while Hong Kong dollar assets grew by $1.3 billion.

The Monetary Authority said the rise in foreign currency assets was due mainly to purchases of foreign currencies with Hong Kong dollars, interest and dividend income from foreign currency assets, increases in repurchase agreements outstanding and certificates of indebtedness. These increases were partly offset by valuation losses on foreign currency investments.

The rise in Hong Kong dollar assets was due mainly to increases in bank borrowings, the balance of the banking system and Exchange Fund Bills and Notes issued but not yet settled. These increases were partly offset by valuation losses on Hong Kong equities held by the Exchange Fund, fiscal drawdowns and sale of Hong Kong dollars for foreign currencies.

The Monetary Base stood at $347.3 billion, up $20.5 billion, or 6.3%, on August. The rise was due mainly to increases in the Aggregate Balance, certificates of indebtedness and the market value of Exchange Fund Bills and Notes outstanding.

Backing Assets increased by $19 billion, or 5.2%, to $381.5 billion. The rise was attributable mainly to an increase in the Aggregate Balance, the issuance of certificates of indebtedness in the Monetary Base together with interest from investments.

These increases were partly offset by exchange loss triggered by a stronger Hong Kong dollar. The backing ratio declined from 110.92% at the end of August to 109.85% at the end of September.