3 June 1999
UK OFFICIAL HOLDINGS OF FOREIGN CURRENCY AND GOLD:
Part I: UK Government Reserves - May 1999
The overall level of the UK Government's reserves, including the forward book, fell by $326 million in May, bringing the end-May total to $35,153 million (£21,954 million(1)) compared with $35,479 million (£22,034 million(2)) at the end of April.
The underlying change in the reserves, including the forward book, was a fall of $1 million.
The underlying change excludes capital transactions that are included in the overall change. In May:
there were repayments of $9 million of Exchange Cover Scheme (ECS) borrowing;
capital repayments of Government Euro Treasury Bills maturing exceeded receipts from those issued by $316 million; and
repayment of HMG debt assigned from the public sector of $1 million.
| $ million | |||
| Spot | Forward | Total | |
| end- May reserves | 34,333 | 820 | 35,153 |
| less | |||
| end- April reserves | 34,398 | 1,081 | 35,479 |
| OVERALL CHANGE | -65 | -261 | -326 |
| less adjustments | 325 | 0 | 325 |
| UNDERLYING CHANGE | 260 | -261 | -1 |
| No intervention operations were undertaken in May. | |||
Part II: Bank of England Holdings of Foreign Currency and Gold - April
The overall level of the Bank of England's holdings of foreign currency and gold, including the forward book, rose by $87 million in May, bringing the end-May total to $3,929 million (£2,454 million(3)) compared with $3,842 million (£2,386 million(4)) at the end of April.
There was no underlying change in the level of the Bank of England's holdings including the forward book.
| $ million | |||
| Spot | Forward | Total | |
| end-May holdings | 10,218 | -6,289 | 3,929 |
| less | |||
| end-April holdings | 10,512 | -6,670 | 3,842 |
| OVERALL CHANGE | -294 | 381 | 87 |
| less adjustments | 294 | -381 | -87 |
| UNDERLYING CHANGE | 0 | 0 | 0 |
The adjustments to the overall change figure include the change in valuation over the month, changes in holdings arising from changes in foreign currency and gold deposits placed with the Bank by overseas central banks and other customers, changes due to the net effect of foreign exchange swaps conducted in the course of the Bank's money market operations, changes arising from the UK participation in the TARGET system, changes arising from the Bank's Euro Bill programme, and other capital items. The foreign exchange swaps are 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 will be 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.
The Bank's participation in the TARGET system has given rise to euro balances with other central banks operating the system. These are in effect off-set by similar balances that the other central banks hold at the Bank. As a result they are shown net in the table above, where they account for $184 million. The gross amount is $20,310 million.
No intervention operations were undertaken in May.
NOTES TO EDITORS
1. The Quarterly Report on UK Official Holdings of Foreign Currency and Gold, to be published on 2 September 1999 and covering the quarter ending 30 June 1999, 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 currency composition of foreign-currency assets, the size and currency composition of foreign-currency liabilities and information on intervention operations, if undertaken.
2. 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.
3. 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.
4. Repayments under the Exchange Cover Scheme in May were as follows:
| Organisation | $ million |
| Strathclyde Regional Council | 4.540 |
| Newcastle County Council | 0.855 |
| Clywd County Council | 0.570 |
| Lancashire County Council | 0.588 |
| Swansea County Council | 0.555 |
| Other Smaller Repayments | 1.442 |
| Total | 8.550 |
5. The figures for June 1999 will be published on Friday 2 July.
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).