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28 April 2000

UK FOREIGN CURRENCY RESERVES PUBLICATION OF INFORMATION

Improvements to the publication of information on UK foreign currency reserves in line with - and in some cases in excess of - the IMF's Special Data Dissemination Standard (SDDS) mark a further step in promoting the Government agenda of openness, transparency and accountability. The figures for April 2000, to be published in May, will be the first published incorporating these improvements.

Welcoming the changes announced today, Economic Secretary Melanie Johnson said:

"The announcement that the UK will be publishing information on the foreign currency reserves in accordance with the IMF's Special Data Dissemination Standard (SDDS) demonstrates the Government's commitment to openness, transparency and accountability.

"In some areas these changes, in conjunction with previous initiatives on reserves publication that this Government has implemented, exceed the IMF's requirements, keeping the UK at the forefront of international best practice."

From April 2000 the following changes will be made to the publication of information on UK foreign currency reserves:

  • the format of the existing monthly press notice will be aligned with the conventions of the G10/IMF reserves template published on the Bank of England's web-site.
  • the monthly press release will, from May 2000, be published on the third working day of each month. The figures, on the new basis, for April 2000 will be published on Thursday 4 May 2000.
  • the Quarterly Report on the UK Official Holdings of Foreign Currency and Gold will be discontinued as the information it was designed to provide is now published in the Treasury's monthly press notice, the IMF template published on the Bank of England's web-site and in the Bank of England's Quarterly Bulletin. The last Quarterly Report covering the period January to March 2000 will be published on Friday 2 June.

iv. valuation will be on a "marked-to-market" basis.

v. best practice (UK GAAP) accounting methodology will be introduced from the financial year 2000-01 for the annual accounts of the Exchange Equalisation Account (EEA), the account which holds UK official holdings of foreign currency and gold.

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NOTES FOR EDITORS

The UK Official holding of foreign currency and gold are held under Treasury control in the Exchange Equalisation Account (EEA). The Bank of England acts as the Treasury's agent in managing the account and in the foreign exchange market.

In line with the IMF's Special Data Dissemination Standard (SDDS) the changes to the monthly press release which will be introduced when the April figures are published on 4 May are:

  1. levels and changes in the UK net foreign currency reserves and the Bank of England net holdings of foreign currency will be published on the basis of deals done during the period. This will replace figures on the gross level of holdings and the change, in both overall and underlying terms, in the level of the spot and forward reserves (settled basis).
  2. data will be compiled on a "marked-to-market" basis (market valuation) rather than on a cash basis using parity rates, set once a year and at historic cost.
  3. the monthly press release will be issued on the third working day of each month rather than on the second working day of each month. This is due to the time needed to produce the considerably more complex data being published.

The monthly press release will continue to report intervention by either the Treasury or the Bank of England and a justification of any intervention carried out.

The last Quarterly Report will be published by the Treasury on 2 June 2000. The Quarterly Report, which includes a broad breakdown of currency assets and liabilities, and a report on intervention, is to be discontinued because the information published in it will now be available in a more timely manner in the Treasury monthly press notice, the IMF template published on the Bank of England web-site (see paragraph 5 below) and in the Bank of England Quarterly Bulletin.

The IMF template will continue to be published on the Bank of England web-site. The template discloses, on a "marked-to-market" basis (market valuation), the UK gold and foreign currency assets, liabilities and derivatives. Detail on asset and liability composition (including a quarterly currency composition report) is also included.

The annual accounts of the Exchange Equalisation Account (EEA) for 1997-98 were the first ever to be published. They are constructed on a cash rather than an accruals basis and provide:

  1. a measure of the EEA's turnover for the year (receipts and payments); and
  2. a statement of the EEA's assets and liabilities valued on a modified historic cost basis rather than an open market value. Gold is valued at a discounted price. And no allowance is made for variations in the price of assets or for any "marked-to-market" gains or losses.

From the financial year 2000-01 onwards the accounts of the EEA will follow the best practice accounting methodology as set out in the UK Generally Agreed Accounting Practice (UK GAAP).

Media enquires should be addressed to Charles Keseru in the Treasury Press Office on 020 7270 5188.

External links

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Press Notices 2000 January to June Index