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Release at 8:15 a.m. EDT
Ottawa, August 6, 2003
2003-038

Official International Reserves

- Official International Reserves 2003 -

The Department of Finance announced today that Canada’s official international reserves decreased by an amount equivalent to US$934 million during July to US$35,765 million. Details on the level and composition of Canada’s reserves as of July 31, 2003, as well as the major factors underlying the change in reserves, are provided below. All figures are in millions of US dollars unless otherwise noted.

Foreign Currency Reserves
Securities				28,771
Deposits				2,027
Total securities and deposits (liquid reserves)				30,798
Gold1				110
Special drawing rights (SDRs)				761
Reserve position in the IMF				4,096
Total:	July 31, 2003			35,765
	June 30, 2003			36,699
Net change				-934
Details on Deposits
Other central banks/Bank for International Settlements				777
Banks headquartered in Canada				0
Of which: located abroad			0
Banks headquartered abroad				1,250
Of which: located in Canada		150
Total				2,027

Details of Net Change
Reserves management operations2	-126
Gains and losses on gold sales	0
Net investment gains and losses
Return on investments3	-366
Foreign currency debt charges	-152
Revaluation effects4	-376
Net government operations5	-43
Official intervention	0
Other transactions6	129
Net change	-934
Currency Composition of Deposits and Securities
US dollars	15,967
Euro	13,881
Yen	943
Other	7
Total	30,798

Predetermined Short-Term Drains on Foreign Currency Reserves (Nominal Value)7
	0-1 month	1-3 months	3-12 months	Total
Foreign currency securities8
Principal	-863	-1,344	-2,762	-4,969
Interest	-38	-203	-925	-1,166
Aggregate short forward positions in foreign currencies vis-à-vis Canadian dollar	0	0	0	0
Aggregate long forward positions in foreign currencies vis-à-vis Canadian dollar	0	0	0	0
Total net drains	-901	-1,547	-3,687	-6,135
Additional Information (Nominal Value)
Undrawn, unconditional credit lines with banks headquartered outside Canada		6,000
Securities lent under repurchase agreements9		-1,398
Securities held under repurchase agreements10		1,250
Financial derivatives assets (net, marked to market)
Forwards		0
Swaps		-232
Notes:  1. There were no sales of gold settled in July. On July 31, gold holdings stood at 0.3 million ounces. The valuation is based on the July 31, 2003, London p.m. fix of US$354.75 per ounce.  2. Net change in securities and deposits resulting from foreign currency funding activities of the Government. (Issuance of foreign currency liabilities used to acquire assets increases reserves, while maturities decrease reserves). During July Canada bills decreased by US$61 million to a level of outstanding bills of US$1,793 million. A Euro-Medium Term Note of US$65 million matured in July.  3. “Return on investments” comprises US$93 million of interest earned on investments and a US$459-million decrease in the market value of securities resulting from changes in interest rates.  4. “Revaluation effects” reflect changes in the market value of reserve assets resulting from movements in exchange rates. 5. “Net government operations” are the net purchases of foreign currency for government foreign exchange requirements and for additions to reserves.  6. Related to securities assumed by the Government of Canada on February 5, 2001 on the dissolution of Petro-Canada Limited and the repayment of a loan made to Thailand in 1998.  7. Predetermined short-term drains include the Government’s contractual obligations in foreign currencies related to payments of principal and interest associated with securities and commitments under swaps and forward contracts coming due during the next 12 months.  8. “Foreign currency securities” include maturities of foreign currency debt, cross-currency swap payments and an estimate of interest payments on foreign currency liabilities.  9. “Securities lent under repurchase agreements” are included in total reserves. Collateral provided in securities-lending transactions is not included in total reserves.  10. Cash invested under repurchase agreements is included in total reserves. Collateral provided in securities-lending transactions is not included in total reserves.

Future Release Dates

The next release is September 4, 2003 (covering the period August 2003).

A list of upcoming release dates is posted on the Department of Finance Web site located at: www.fin.gc.ca/invest_x/releaseDates_e.asp

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For further information:

For further information on the Exchange Fund Account, please consult the 2002 Annual Report to Parliament on the Operations of the Exchange Fund Account by the Minister of Finance and Report of the Auditor General to the Minister of Finance on the Examination of the Accounts and Financial Statements of the Exchange Fund Account, located at www.fin.gc.ca/purl/efa-e.html.

Official International Reserves (10-Year Synopsis)