94/01
3 August 2001
UK OFFICIAL HOLDINGS OF INTERNATIONAL RESERVES:
Part I: UK Government Foreign Currency Assets and Liabilities – July 2001
1. The UK Government’s net reserves fell by $54 million in July, bringing the end-July total to $13,168 (£9,238 million1) compared with $13,222 million (£9,400 million2) at the end of June.
US $ million: market values |
|||
|
end June 2001 |
end July 2001 |
||
Gross Reserves3 |
42,499 | 40,919 | |
Liabilities |
-29,277 | -27,751 | |
of which |
|||
|
foreign currency forwards and swaps (net)4 |
-15,088 | -15,398 | |
| repo transactions5 | -71 | -181 | |
Net reserves6 |
13,222 | 13,168 | |
Change in net reserves |
-54 | ||
| of which | |||
| valuation effects | -29 | ||
| transactions against sterling | -25 | ||
| of which | |||
| UK public sector customers | -1,596 | ||
| Other | 1,571 | ||
2. As set out in the Chancellor’s letter of 6 May 1997 to the Governor of the Bank of England, if the Government so instructs then the Bank, acting as its agent, may intervene in the foreign exchange market by buying or selling the Government’s foreign exchange reserves. If intervention is undertaken, the monthly press release will provide details of the amount and date of the intervention and an explanation of why it was undertaken. No intervention operations were undertaken in July.
Part II: Bank of England Foreign Currency Assets and Liabilities – July 2001
The Bank of England’s net holdings of foreign currency and gold fell by $6 million in July, bringing the end-July total to $67 million (£47 million1) compared with $73 million (£52 million2) at the end of June.
US $ million: market values |
|||
|
end June 2001 |
end July2001 |
||
Assets3 |
9,865 | 9,591 | |
Liabilities |
-9,791 | -9,524 | |
of which |
|||
|
foreign currency forwards and swaps (net)4 |
-687 | -741 | |
| repo transactions5 | -42 | -105 | |
Net assets6 |
73 | 67 | |
Change in net holdings |
-6 | ||
| of which | |||
| valuation effects | -9 | ||
| transactions against sterling | 3 | ||
| of which | |||
| UK public sector customers | - | ||
| Other | 3 | ||
2. As set out in the Chancellor’s letter of 6 May 1997 to the Governor of the Bank of England, the Bank may also undertake foreign exchange operations to intervene in support of its monetary policy objective. If intervention is undertaken, the monthly press release will provide details of the amount and date of intervention and an explanation of why it was undertaken. No such intervention operations were undertaken by the Bank in July.
3. The Bank of England’s foreign currency assets and liabilities arise from banking deposits placed with the Bank by overseas central banks and other customers, the net effect of foreign exchange swaps conducted in the course of the Bank’s money market operations, UK participation in the TARGET system, the Bank’s euro Bill and Notes programme, and other capital items. Foreign exchange swaps may be undertaken as a supplement to the Bank’s usual money market techniques to provide sterling liquidity to the market, and are purely technical in nature. The proceeds of the Bank’s euro Bills are used to finance the provision by it of intra-day liquidity, on a secured basis, to participants in CHAPS euro, as part of the arrangements for TARGET.
1 When converted at the closing market rate (4pm) of £1 = $1.4254 on 31 July 2001.
2 When converted at the closing market rate (4pm) of £1 = $1.4066 on 29 June 2001.
3 In this presentation gross reserves exclude market valuation of foreign currency forwards and swaps. These derivatives are shown (excl sterling leg) within liabilities.
4 Net present value of foreign currency forwards, interest rate and cross currency swaps (excl sterling leg).
5 Market value of liabilities to repay foreign currency received in repo transactions.
6 Figures may not sum due to roundings.
Notes to Editors
Background
1. The UK’s international reserves are now being published in accordance with the methodology developed by the International Monetary Fund in the context of revisions to their Special Data Dissemination Standard (SDDS), and the G10 central banks in their report “Enhancing transparency regarding authorities’ foreign currency liquidity position”.
2. The UK began to disclose additional information on its foreign currency assets and liabilities required under the International Monetary Fund’s Special Data Dissemination Standard (assets, liabilities and derivatives) from July 1999. Data for end-July 1999 onwards can be found on the Bank of England’s website.
Methodology and definitions
3. The Bank of England’s website also provides information on the methodology now used and definitions of the main conventions employed.
A National Statistics publication
4. National Statistics is the official source for authoritative, accurate and relevant information on the economy and society. It brings together a vast range of statistical information overseen by the National Statistician. The National Statistics logo is your assurance of statistics produced to the highest professional standards.
Next publication date
5. The figures for August 2001 will be published on Wednesday 5 September 2001.
Enquiries
6. Media enquiries about this press release should be addressed to Simon Moyes in the Treasury Press Office on 020 7270 4420.
7. Public enquiries (non-media) about this press release should be addressed to the Treasury’s Public Enquiry Unit on
Telephone: 020 7270 4588
Fax: 020 7270 4574
National Statistics Public Enquiry Service
8. For general enquiries about National Statistics, contact the National Statistics Public Enquiry Service on
Telephone: 020 7533 5888
minicom 01633 812399
Fax 01633 652747
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