HM Treasury News Release
116/97                                            2 October 1997
____________________________________________________________________

                 THE RESERVES IN SEPTEMBER 1997
                                
The overall level of the UK's official reserves fell by $91 million
in September, bringing the end September reserves to $41,015 million
(25,392 million Pounds[1]), compared with $41,106 million (25,350
million Pounds[2]) at the end of August.

The underlying change in the reserves was a rise of $17 million.
The underlying change excludes a number of factors which are included
in the total change:-

 -   There were repayments of borrowing under the Exchange Cover
     Scheme of $107 million;

 -   HMG ECU Treasury Bills maturing exceeded those issued by $1
     million.


                              $ million


 End September reserves          41,015
 less
 End August reserves             41,106
 OVERALL CHANGE                    - 91
 less adjustments                 - 108
 UNDERLYING CHANGE                   17



Notes to Editors

1.   The underlying change 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. 

2.   Because there is a two day settlement lag in the foreign
exchange market, the September reserves figures include transactions
for the last two working days of August and exclude operations in the
last two working days of September.

3.   The  above figures can also be obtained from the Reuters Monitor
(page TREA), Bridge News (p 170), Telerate (p22494) and Topic
(p6800).

4.    The Chancellor announced on 21 September 1997 a new policy
of openness on the UK's gold and foreign exchange reserves. 
Addressing the International Monetary Fund (IMF) Interim Committee in
Hong Kong, the Chancellor said he would publish, in due course, a new
quarterly report on foreign exchange operations, which would include
the UK's forward foreign exchange position.  Further details can be
found in HM Treasury News Release 112/97.  The monthly press release
on the Reserves will continue as at present.

5.   Repayments under the public sector Exchange Cover Scheme in
September were as follows:-

     
 Organisation              $million

 BNFL                        100.0
 West Glamorgan                0.8
 Rotherham                     0.6
 West Isles Island Council     0.6
 Borders                       0.6
 Civil Aviation Authority      0.6
 Highlands                     0.5
 Other Smaller Repayments      3.5
 TOTAL                       107.0


[1] When converted at the closing market rate of   
    1 Pound = 1.6153 on 30 September 1997
[2] When converted at the closing market rate of
    1 Pound = 1.6215 on 29 August 1997