The press release issued by HM Treasury on 2 April 1998.

UK OFFICIAL HOLDINGS OF FOREIGN CURRENCY AND GOLD: MARCH 1998

Part I: UK Government Reserves

The overall level of the UK Government’s spot reserves fell by $6 million in March, bringing the end-March total to $36,527 million (21,814 million Pounds) compared with $36,533 million (22,199 million Pounds) at the end of February.

The underlying change in the reserves was a decrease of $1 million.

The underlying change excludes factors that are included in the overall change.  In March:

there were repayments of $6 million of public-sector borrowing for which the Government has provided an exchange-rate guarantee under the Exchange Cover Scheme (ECS); and

receipts from Government ECU Treasury bills issued exceeded repayment on those maturing by $1 million.

After the annual revaluation, the reserves stood at $34,219 million (20,435 million Pounds).

Part II: Bank of England Holdings of Foreign Currency and Gold

The level of the Bank of England’s spot holdings of foreign currency and gold was $2,961 million (1,768 million Pounds ) at end-March compared with $6,660 million (4,047 million Pounds) at the end of February.

The change in the Bank’s holdings includes changes in foreign-currency and gold deposits placed with the Bank by overseas central banks and other customers and the change in valuation over the month.

The change also includes a decrease of $3,729 million in the Bank’s spot holdings due to the net effect of foreign-exchange swaps conducted in the first quarter of 1998 in the course of the Bank’s money-market operations.  These foreign-exchange swaps were
undertaken as a supplement to the Bank’s usual money-market techniques to provide sterling liquidity to the market.  The operations are purely technical in nature and have no monetary-policy significance; they are likely to be used from time to time in the future, depending on market conditions.