UK official holdings of international reserves

Part I: UK Government Foreign Currency Assets and Liabilities – February 2005

1. UK Government net reserves rose by $198 million in February 2005, bringing the end-February total to $18,883 million (£9,806 million¹) compared with $18,685 million (£9,908 million²) at end-January 2005.

	US $ million: market values
	End January 2005		End February 2005
Gross Reserves³	48,077		49,284
Liabilities	-29,392		-30,401
of which
foreign currency forwards and swaps (net)⁴	-18,524		-19,045
repo transactions⁵	-4,846		-5,416
Net reserves⁶	18,685		18,883
Change in net reserves		198
of which
valuation effects		207
transactions against sterling		-9
of which
UK public sector customers		-388
Other		379

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, the Bank, acting as its agent, may intervene in the foreign exchange market by buying or selling Government 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 February.

Part II: Bank of England Foreign Currency Assets and Liabilities – February 2005

1. Bank of England net holdings of foreign currency and gold rose by $3 million in February 2005, bringing the end-February total to $112 million (£58 million¹) compared with $108 million (£57 million²) at end-January 2005.

	US $ million: market values
	End January 2005		End February 2005
Assets³	26,988*		28,176
Liabilities	-26,880*		-28,064
of which
foreign currency forwards and swaps (net)⁴	-3,403		-3,240
repo transactions⁵	0		0
Net assets⁶	108		112
Change in net holdings		3
of which
valuation effects		6
transactions against sterling		-2
of which
UK public sector customers		-
Other		-2

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. The Bank undertook no such intervention operations in February.

3. Bank of England 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 Bank money market operations, UK participation in the TARGET system, Bank euro Bill and Note programmes, and other capital items. Foreign exchange swaps may be undertaken as a supplement to usual Bank money market techniques to provide sterling liquidity to the market, and are purely technical in nature.

1 When converted at the closing market rate (4pm) of £1 = $1.9257 on 28 February 2005.

2 When converted at the closing market rate (4pm) of £1 = $1.8859 on 31 January 2005.

3 In this presentation gross reserves in part 1 and assets in part 2 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 rounding.

* The Bank of England’s foreign currency reserves figures for January 2005 have been revised because quality assurance of data has discovered that certain data had been incorrectly recorded; this has now been rectified.

Notes to Editors

Background

1. UK international reserves figures are published in accordance with the methodology developed by the International Monetary Fund in the context of revisions to its 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 Special Data Dissemination Standard (assets, liabilities and derivatives) from July 1999. Past data can be revised; the most up to date historical data for end-July 1999 onwards can be found on the Bank of England website at www.bankofengland.co.uk/statistics/reserves.

Methodology and definitions

3. The Bank of England 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 about National Statistics visit www.statistics.gov.uk. The release of data in this press notice has followed the National Statistics Code of Practice and Protocol of Release Practices.

Internet version

5. If you have access to the Internet, you can find this news release and
other Treasury information at www.hm-treasury.gov.uk.

Next publication date

6. The figures for March 2005 are due for publication on Tuesday 5 April 2005.

Enquiries

7. Media enquiries about this press release should be addressed to Will Straw 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 Correspondence and Enquiry Unit on:

Telephone: 020 7270 4558
Fax: 020 7270 4861
Email: ceu.enquiries@hm-treasury.gov.uk

National Statistics Public Enquiry Service

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

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Email: info@statistics.gov.uk
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Letters: Room DG/18
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LONDON
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10. You can also find National Statistics on the Internet at www.statistics.gov.uk.