Amadeusz Juskowiak

Uk reserves show underlying rise in february

Britains gold and currency reserves showed an underlying rise of 287 mln dlrs in February after a 72 mln dlrs rise in January the Treasury said

The underlying trend which is a guide to Bank of England operations to support the pound on foreign exchanges is net of borrowings and repayments

This was above market expectations for a 100 mln dlrs rise

The Treasury said the Bank of England used the opportunity of strong demand to rebuild reserves after losses last autumn and said the underlying rise was still relatively modest

Actual reserves rose by 305 mln dlrs in February to 2226 billion dlrs after rising 29 mln in January to 2195 billion

Accruals of borrowings under the exchange cover scheme were 36 mln dlrs last month after 163 mln in January while repayments were 16 mln dlrs after the previous 151 mln a Treasury spokesman said

Capital repayments totalled two mln dlrs In January capital repayments totalled 14 mln dlrs with a valuation change that resulted in a fall of 41 mln dlrs due to the quarterly rollover from the European Monetary Cooperation Fund swap

The Treasury would not comment on the Bank of Englands market operations but currency traders reported moderate Bank of England intervention to curb upward pressure on the pound today

A Treasury spokesman commenting on the reserves figures said that the government does not want sterling either to rise too far or to fall substantially from current levels

He noted that the Chancellor of the Exchequer Nigel Lawson stressed this after the recent Paris currencies meeting