Hong Kong Exchange Fund Assets Drop HK$59.9 Billion in July
On.cc · 2 SOURCESabout 2 hours ago1 MIN
Summary
The Hong Kong Monetary Authority disclosed on Monday that the Exchange Fund's total assets contracted to HK$44,037 billion as of July 31, 2026, representing a month-on-month decline of HK$59.9 billion. The contraction was driven by a HK$772 billion decrease in Hong Kong dollar-denominated assets, which was partially offset by a HK$173 billion increase in foreign currency holdings. The monetary base grew HK$51 billion to HK$20,801 billion, while backing assets rose HK$62 billion to HK$23,268 billion, lifting the coverage ratio to 111.92 percent.
Key Points
- Exchange Fund total assets amounted to HK$44,037 billion as of July 31, 2026, down HK$59.9 billion from June
- Hong Kong dollar assets contracted HK$772 billion, primarily due to reduced month-end balances of unsettled Exchange Fund bills and bonds
- Foreign currency assets expanded HK$173 billion, lifted by increased currency swap agreements and investment interest income
- The monetary base increased HK$51 billion to HK$20,801 billion, representing 0.2 percent month-on-month growth
- Support assets rose HK$62 billion to HK$23,268 billion, pushing the backing ratio from 111.84 percent to 111.92 percent
Why It Matters
The Exchange Fund's asset contraction signals the impact of portfolio rebalancing and mark-to-market valuations on Hong Kong's fiscal reserves, with implications for the linked exchange rate system's financial robustness .
The Exchange Fund's asset contraction signals the impact of portfolio rebalancing and mark-to-market valuations on Hong Kong's fiscal reserves, with implications for the linked exchange rate system's financial robustness .