HM Treasury News Release
134/97                                       4 November 1997
_______________________________________________________________
                                
                  THE RESERVES IN OCTOBER 1997
                                
The overall level of the UK's official reserves fell by $2,445 
million in October, bringing the end October reserves to $38,570 
million (23,005 million Pounds[1]), compared with $41,015 million 
(25,392 million Pounds[2]) at the end of September.

The underlying change in the reserves was a rise of $7 million.

The underlying change excludes a number of factors which are 
included in the total change:-

  -  5.5bn Deutsche Mark bond matured: $2,982 million

  -  There were repayments of borrowing under the Exchange Cover 
     Scheme of $9 million

  -  Revaluation arising from EMI Swap resulting in a reduction
     of $17 million

  -  HMG debt assigned from public sector of $12 million

  -  HMG ECU Treasury Notes issued were $568 million





                                  $ million


End October reserves                 38,570
less
End September reserves               41,015
OVERALL CHANGE                       - 2445
less adjustments                       2452
UNDERLYING CHANGE                         7



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 October reserves figures include 
transactions for the last two working days of September and 
exclude operations in the last two working days of October.

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.

4.   Repayments under the public sector Exchange Cover Scheme in 
October were as follows:-


Organisation                        $million


Strathclyde Regional Council          3.9
Lothian Regional Council              1.1
Lancashire County Council             0.8
Tayside Regional Council              0.6
Other Smaller Repayments              2.7
TOTAL                                 9.1





[1] When converted at the closing market rate of 1 Pound = 1.6766 
    on 31 October 1997
[2] When converted at the closing market rate of 1 Pound = 1.6153 
    on 30 September 1997