UK OFFICIAL HOLDINGS OF INTERNATIONAL RESERVES:

Part I: UK Government Foreign Currency Assets and Liabilities January 2002

1. The UK Government s net reserves fell by $126 million in January, bringing the end-January total to $13,354 (£9,447 million1) compared with $13,480 (£9,261 million2) at the end of December.

	US $ million: market values
	end December 2001		end January 2002
Gross Reserves³	39,359		37,289
Liabilities	-25,879		-23,934
of which
foreign currency forwards and swaps (net)⁴	-15,704		-15,656
repo transactions⁵	-162		-449
Net reserves ⁶	13,480		13,354
Change in net reserves		-126
of which
valuation effects		-143
transactions against sterling		17
of which
UK public sector customers		-180
Other		196

Part II: Bank of England Foreign Currency Assets and Liabilities January 2002

The Bank of England s net holdings of foreign currency and gold rose by $4 million in January, bringing the end-January total to $68 million (£48 million1) compared with $64 million (£44 million2) at the end of December.

	US $ million: market values
	end December 2001		end January 2002
Liabilities	-10,302		-11,406
of which
foreign currency forwards and swaps (net)⁴	-1,075		-1,130
repo transactions⁵	-486		-19
Net assets⁶	64		68
Change in net holdings		4
of which
valuation effects		-6
transactions against sterling		10
of which
UK public sector customers		-
Other		10

3. 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 January.

4. 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 Note 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 = $1.4135 on 31 January 2002.

2. When converted at the closing market rate (4pm) of £1 = $1.4555 on 31 December 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 at www.bankofengland.co.uk/statistics/reserves.

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. For more information, visit the National Statistics website.

Internet version

5. If you have access to the Internet, you can find this news release and other Treasury information on the Treasury website.

Next publication date

6. The figures for February 2002 will be published on Monday 4 March 2002.

Enquiries

7. Media enquiries about this press release should be addressed to Simon Moyse in the Treasury Press Office on 020 7270 4420.

8. Public enquiries (non-media) about this press release should be addressed to the Treasury s Public Enquiry Unit on

Telephone: 020 7270 4558

Fax: 020 7270 4574

Email Public Enquiries

National Statistics Public Enquiry Service

9. For general enquiries about National Statistics, contact the National Statistics Public Enquiry Service on

Telephone: 020 7533 5888

minicom: 01633 812399

E-mail National Statistics Public Enquiry Service

Fax: 01633 652747

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10. You can also find the National Statistics website on the Internet.

Press Notice index 2002 January to June