160/98
2 October 1998
UK OFFICIAL HOLDINGS OF FOREIGN CURRENCY AND GOLD: SEPTEMBER 1998
Part I: UK Government Reserves
The overall level of the UK Government's spot reserves fell by $7 million in September, bringing the end-September total to $35,282 million (£20,758 million) compared with $35,289 million (£21,218 million at the end of August).
The underlying change in the reserves was a fall of $1million.
The underlying change excludes capital transactions that are included in the overall change. In September there were repayments of $6 million of public-sector borrowing for which the Government has provided an exchange-rate guarantee under the Exchange Cover Scheme (ECS).
|
$ million |
|
| end-September reserves |
35,282 |
| less | |
| end-August reserves |
35,289 |
| OVERALL CHANGE |
-7 |
| less adjustments |
6 |
| UNDERLYING CHANGE |
-1 |
Part II: Bank of England Holdings of Foreign Currency and Gold
The level of the Bank of England's spot holdings of foreign currency and gold was $3,776 million (£2,216 million) at end-September compared with $5,476 million (£3,292 million) at the end of August.
|
$ million |
|
| end-September holdings |
3,766 |
| less | |
| end-August holdings |
5,476 |
| OVERALL CHANGE |
-1,710 |
The change in the Bank's holdings includes changes in foreign-currency and gold deposits placed with the Bank by overseas central banks and other customers, and the change in valuation over the month.
The change also includes a reduction of $2,260 million in the Bank's spot holdings due to the net effect of foreign-exchange swaps conducted in the course of the Bank's money-market operations. These foreign exchange swaps are undertaken as a supplement to the Bank's usual money market techniques to provide sterling liquidity to the market. The operations are purely technical in nature and have no monetary policy significance; they are likely to be used from time to time in the future, depending on market conditions.
NOTES TO EDITORS
1. Due to the two-day settlement lag in the foreign-exchange market, both the UK Government figures and the Bank of England figures include transactions conducted in the last two working days of August and exclude transactions conducted in the last two days of September.
2. The Quarterly Report on UK Official Holdings of Foreign Currency and Gold, to be published on 2 December 1998 and covering the quarter ending 30 September 1998, will contain further information about the foreign-currency and gold holdings of the Government and the Bank of England. This will include, for each, the size of the forward foreign-exchange position, the currency composition of foreign-currency assets, the size and currency composition of foreign-currency liabilities and information on intervention operations, if undertaken.
3. The Government and Bank of England figures have been produced on the basis of different accounting methodologies. Therefore, no overall total for the two is shown. Details of the accounting methodologies were included in the Quarterly Report published on 3 March 1998 (covering October-December 1997) and will be included in future Quarterly Reports.
4. The underlying change in the Government's reserves is the result of a variety of transactions, both debits and credits, including, for example, transactions for Government departments, transactions with other central banks and interest receipts and payments. For these reasons, the underlying change should not be taken as an indication of market intervention.
5. Repayments under the Exchange Cover Scheme in September were as follows:
| Organisation |
$ million |
| South Yorkshire County Council |
0.681 |
| Civil Aviation Authority |
0.557 |
| Highland Regional Council |
0.480 |
| Lancashire County Council |
0.477 |
| West Glamorgan County Council |
0.472 |
| Other smaller repayments |
2.853 |
| Total |
5.520 |
6. The figures contained in this press release can also be
obtained from the Reuters Monitor (page TREA), Bridge News (page 170), Telerate (p22494) and Topic (p6800).