Official International Reserves - January 6, 2020

- All 2020 Official International Reserves -

The Department of Finance Canada announced today that Canada’s official international reserves increased by an amount equivalent to US$284 million during December to US$85,297 million. This was driven by reserves management funding operations (US$47 million)¹, and a net gain in investments (US$237 million)².

Details on the level and composition of Canada’s reserves as of December 31, 2019, 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.

Notes:

1. Net change in securities and deposits resulting from foreign currency funding activities of the Government. Foreign reserves are managed under an asset-liability matching framework. Therefore, when a foreign currency liability matures, assets are used to repay the principal, leading to a decrease in reserves. During December, Canada bills decreased by US$10.7 million to a level of outstanding bills of US$1,906.4 million. An equivalent of US$368.1 million in cross-currency swaps was raised during the month while US$210.3 million in cross-currency swaps and US$100.0 million in euro medium term notes matured during the month.
2. Net investment gains and losses include return on investments, foreign currency debt charges and revaluation effects.
3. “Return on investments” comprises US$85 million of interest earned on investments and a US$248 million decrease in the market value of securities.
4. “Revaluation effects” reflect changes in the market value of reserve assets resulting from movements in exchange rates. In December, the revaluation effect was mainly due to the appreciation of the euro and GBP.
5. “Net government operations” are the net purchases of foreign currency for government foreign exchange requirements and for additions to reserves.
6. “Foreign currency securities” include maturities of foreign currency debt, cross-currency swap payments and an estimate of interest payments on foreign currency liabilities.
7. “Securities lent under repurchase agreements” are included in total reserves. Collateral provided in securities lending transactions is not included in total reserves.
8. 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 February 5, 2020 (covering the period of January 2020).

For further information on the Exchange Fund Account, please consult the Report on the Management of Canada’s Official International Reserves—April 1, 2017 – March 31, 2018.