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Hong Kong dollar – Wikipedia

currency of Hong Kong
“ HKD ” redirects here. For the airport in Japan, see Hakodate Airport
The Hong Kong dollar ( chinese : 港元, augury : HK$ ; code : HKD ) is the official currentness of the Hong Kong Special administrative Region. It is subdivided into 100 cents or 1000 mils. The Hong Kong Monetary Authority is the monetary authority of Hong Kong and the Hong Kong dollar.

Three commercial banks are licensed by the Hong Kong Monetary Authority to issue their own banknotes for general circulation in Hong Kong. These banks, HSBC, Bank of China, and Standard Chartered, issue their own designs of banknotes in denominations of HK $ 20, HK $ 50, HK $ 100, HK $ 500 and HK $ 1000, with all designs being exchangeable to one another in the same denomination of bill. however, the HK $ 10 bill and all coins are issued by the Government of Hong Kong. As of April 2019, the Hong Kong dollar is the ninth most trade currency in the world. [ 3 ] Hong Kong uses a connect exchange rate system, trading since May 2005 in the range US $ 1 : HK $ 7.75–7.85. apart from its habit in Hong Kong, the Hong Kong dollar is besides used in neighbouring Macau. It is pegged at 1 Hong Kong dollar to 1.03 Macanese pataca, and is generally accepted at par or MOP 1.00 for retail purchases. [ 4 ]

history [edit ]

When Hong Kong was established as a spare deal port in 1841, there was no local currency in everyday circulation. Foreign currencies such as amerind rupees, spanish or mexican 8 reales, and chinese cash coins circulated. [ 5 ] Since 1825, it had been the policy of the british politics to introduce sterling argent neologism to all of its colonies, and to this end, in 1845 the spanish or mexican 8 reales coins were set at a legal tender respect of 4 shillings, 2 penny sterling ( 50 penny ). [ citation needed ] But precisely as in the case of the british North American colonies, the attempts to introduce the greatest neologism failed to overcome the potent local adhesiveness to the silver spanish dollar system that had been in wide circulation across the Far East, emanating for centuries from Manila in the Philippines as part of the spanish East Indies in the spanish colonial empire through the Manila-Acapulco Galleon Trade with the coins minted in the spanish Americas in Mexico or Peru or Bolivia. By 1858, the british government gave up all attempts to influence the currency situation in Canada, and by the 1860s it came to the lapp realization in Hong Kong : that there was no point in trying to displace an already existing currency system. In 1863, the Royal Mint in London began issuing special subsidiary company coinage for use in Hong Kong within the dollar system, though other national currencies circulated unofficially for years afterwards. [ 5 ] In 1866, a local mint was established at Cleveland Street in Causeway Bay on Hong Kong Island for the function of minting Hong Kong argent dollar and half dollar coins of the lapp measure and alike compare to their Spanish/Mexican counterparts. [ 5 ] The Chinese did not however receive these new Hong Kong dollars well, and in 1868 the Hong Kong Mint was closed down with a loss of $ 440,000. The machinery at the Hong Kong mint was sold first to Jardine Matheson and in turn to the Japanese and used to make the first Yen coins in 1870. In the 1860s, banknotes of the newfangled british colonial banks, the Hong Kong and Shanghai Banking Corporation and the Chartered Bank of India, Australia and China, denominated in dollars, besides began to circulate in both Hong Kong and the wide region. In 1873, the international silver crisis resulted in a devaluation of argent against gold-based currencies. Since the silver dollars in the US and Canada were attached to a gold substitute standard, this entail that the argent dollars circulating along the China coast dropped in value as compared to the U.S. dollar and the canadian dollar .

early twentieth hundred [edit ]

By 1895, the circumstances had changed to the extent that there was now a dearth of Spanish/Mexican dollars and the authorities in both Hong Kong and the Straits Settlements were putting pressure on the authorities in London to take measures to have a regular supply of ash grey dollar coins. London finally acquiesced and legislation was enacted in attempts to regulate the coinage. New british trade dollars were coined at the mints in Calcutta and Bombay for use in both Hong Kong and the Straits Settlements. In 1906, the Straits Settlements issued their own silver medal dollar mint and attached it to a amber sterling substitute standard at a cook prize of 2 shillings and 4 penny. This was the point of deviation as between the Hong Kong unit and the Straits unit. In British Weihaiwei, the Hong Kong dollar circulated jointly with the taiwanese yuan from 1914 to 1930, when Weihaiwei was returned to the Republic of China. By 1935, only Hong Kong and China remained on the argent standard. In that year, Hong Kong, concisely after China, abandoned argent and introduced a crawl pin to sterling of £1 = HK $ 15.36 to HK $ 16.45. It was from this point in time that the concept of a Hong Kong dollar as a clear-cut whole of currency came into being. The One-Dollar Currency Note Ordinance of that class led to the introduction of one-dollar notes by the politics and the politics acknowledged the Hong Kong dollar as the local anesthetic monetary unit. It was not until 1937 that the legal attendant of Hong Kong was ultimately unified. In 1939, the Hong Kong dollar was put on a fixed peg of HK $ 16 = £1 ( $ 1 = 1 s 3 vitamin d ). The discussion about switching from the argent standard to the gold standard began deoxyadenosine monophosphate early as 1930. A committee composition was released in May 1931. It concluded that it was important for Hong Kong to facilitate free menstruate of capital with China and the lapp monetary criterion was thus preferred. The report besides recommended the Hong Kong Government only to take over the charge of note issue when the banks failed to do indeed. actually, the Hong Kong Government was not will to take up the logistics of note issue, and some officials even thought that the public had greater academic degree of confidence in the notes issued by those long-established banks than that by the government. [ 6 ] During the japanese occupation, the japanese military yen were the only means of everyday exchange in Hong Kong. When the yen was inaugural introduced on 26 December 1941, the exchange rate was ¥1 yen = HK $ 2. however, in August 1942, the rate was changed to HK $ 4 to ¥1 hankering. The yen became the entirely legal sensitive on 1 June 1943. The consequence of local anesthetic currency was resumed by the Hong Kong government and the authorized local banks after liberation, with the pre-war pace of HK $ 16 = £1 being restored. The yen was exchanged at a rate of ¥100 = HK $ 1. On 6 September 1945, all military ache notes used in japanese colonies were declared void by the japanese Ministry of Finance .

Post-WWII menstruation [edit ]

The Hong Kong dollar in the greatest area [edit ]

After the end of the Second World War, Hong Kong dollar was re-pegged to greatest at a cook rate identical to the pre-war level. [ 7 ] meanwhile, the United Kingdom made efforts in maintaining the sterling area with countries of the british Commonwealth arsenic well as its colonies. It imposed exchange controls on non-sterling area countries, barring them from freely converting british pounds into US dollars, but no such limitation was placed on greatest area countries. As a colony of the british Empire, Hong Kong was obliged to observe the greatest sphere regulations. however, its unique geo-economic place afforded Hong Kong the ability to defy substitution controls by operating a double arrangement with the greatest area and a release central market chiefly with the US dollar, which was technically illegal from 1949 to 1967. [ 8 ] Hong Kong economy specialist Leo Goodstadt argues that ministers and officials in London were bound to tolerate Hong Kong ‘s situation, given Hong Kong ‘s extensive trade with PRC, and the long collusion between officials in Hong Kong, bankers and local business communities. [ 9 ] People ‘s Republic of China ( PRC ) established by the Chinese Communist Party in 1949 was in desperate necessitate for alien currency particularly after the Korean War ( 1950-1953 ) and the Sino-Soviet split in the early 1960s for international deal with countries of non-Soviet bloc. The british sterling obtained through Hong Kong was able to finance 28 % and 46 % of PRC ‘s total import from 1963 to 1967 and from 1970 to 1971 respectively. [ 10 ] Of the british greatest obtained by PRC through Hong Kong during 1953 and 1971, about 40-50 % was supplied by The Hongkong and Shanghai Banking Corporation ( HSBC ), the de facto “ cardinal bank ” in Hong Kong, which accounted for 10 % of annual foreign currency needed by PRC in the period. [ 11 ]

The impacts of the devaluation of the beat in 1967 [edit ]

In the 1960s, the UK found it unmanageable to keep the value of greatest as it was, with its character as official modesty currentness flush within the sterling area. In 1964, greatest was 83 % of the official reserves of abroad greatest area countries, but this share had decreased to 75 % in 1966 and to 65 % in 1967. [ 12 ] When greatest was devalued by the UK in 1967, and Hong Kong dollar ‘s nail down to the impound resulted in a re-valuation of Hong Kong dollar from $ 16 to $ 14.5, a 10 % re-valuation against the syrian pound and 5.7 % devaluation against the US dollar. [ 13 ] The unilateral devaluation sparked a encircle of grievances among local business communities vitamin a well as colonial officials in Hong Kong because the official reserves and secret savings in sterling were substantial from Hong Kong. In the 1950-60s, Hong Kong accumulated significant reserves in greatest with its economic growth, money provide was exponentially expanded from £140-£160 million in the late 1950s to £363 million in October 1967, equivalent to 10 % of the UK ‘s sum sterling liabilities to the oversea sterling area before the devaluation. [ 14 ] Subsequently, Hong Kong and London engaged in talks about recompense and auspices against far losses. Considering the electric potential diversification of official reserves from sterling to the US dollars by the Hong Kong government officials, London agreed to offer substitute guarantees to protect Hong Kong against potential devaluation of greatest in the future, which was the first to receive such guarantees among the sterling area countries. [ 15 ]

Floating currentness system 1974-1983 [edit ]

After the US ‘s cessation of the convertibility between gold and the U.S. dollar in October 1971, Britain abandoned the fixate switch over rate with the U.S. dollar and extended the commute controls besides to the Sterling Area countries, which put an effective end to the Sterling Area in 1972. [ 16 ] In the same class, the Hong Kong dollar was pegged to the U.S. dollar at a rate of HK $ 5.65 = US $ 1. This was revised to HK $ 5.085 = US $ 1 in 1973. Since 1974, the Hong Kong dollar was no long anchored in another currency, which officially changed the monetary regimen from currency board system to a floating currency arrangement .

Linked Exchange Rate System since 1983 [edit ]

On 17 October 1983, Hong Kong dollar was formally pegged to the U.S. dollar at a rate of HK $ 7.8 = US $ 1, officially switching spinal column to the currency board organization. The peg of Hong Kong dollar to the U.S. dollar in 1983 actually took place in the context of Sino-British negotiation regarding the future of Hong Kong after 1997. Due to the miss of populace confidence in the talks, on 24 September 1983, Hong Kong dollar was devalued by 15 % over 2 days to a historical low at HK $ 9.6 to US $ 1. public panic set in and there were runs on foodstuff on this Black Saturday ( 1983 ). [ 17 ] Amidst the monetary crisis, John Greenwood, an economist who was late dubbed the “ architect of the Linked Exchange Rate System “ in Hong Kong, [ 18 ] advocated the proposal to peg the Hong Kong dollar to the U.S. dollar with a revert to the early currency circuit board system. The proposal received defend from two government officials within the Monetary Affairs Branch of the Hong Kong Government, namely, the Deputy Secretary for Monetary Affairs Tony Latter and the Government Economist Alan McLean as a virtual way to restore confidence in the Hong Kong dollar. [ 19 ] After discussions between London and Hong Kong, the Financial Secretary of Hong Kong Government John Bremridge announced to peg the Hong Kong dollar with the U.S. dollar at a rate of HK $ 7.8 to US $ 1 in a currentness board fashion on 17 October 1983. When recalling the choice of rate, Tony Latter notes that a pace of HK $ 7.25 to HK $ 7.50 was considered a reasonable range in macroeconomic terms, given the rate against the U.S. dollar about HK $ 6.60 before the crisis and the rate around HK $ 8.30 to HK $ 8.80 when the politics ‘s intention to change monetary government was revealed in early October. In political terms, the government did not want to set the rate excessively weak so as to warrant international allegations of currency handling for competitive advantages, or excessively strong a pace that would result in high concern rates and the eventual abandonment of the rate. HK $ 7.8 was finally selected, as the government hoped to demonstrate that the situation has been by rights stabilized and it was felt that the rate below HK $ 8.0 can achieve this determination psychologically. [ 20 ] John Bremridge was once quoted saying that the rate was reasonably “ a number off the breeze ”, but the most important thing was the restoration of public assurance in Hong Kong dollar with the peg amidst the crisis. [ 21 ] The solution in its current mannequin was favored by politics officials for reasons beyond monetary considerations. financially, the currentness nail down was designed not to require the Bank of England to lend its reserves to maintain Hong Kong ‘s currency peg. politically, the currency board system well demonstrated the autonomy London has given to Hong Kong in economic policymaking amidst british negotiation with China to grant Hong Kong ‘s higher autonomy after 1997. [ 22 ] As envisioned, the currentness board monetary regimen continues to function with the same peg rate beyond the handover of sovereignty of Hong Kong to China in 1997 .

Post-1997 period [edit ]

The Basic Law of Hong Kong and the Sino-British Joint Declaration provides that Hong Kong retains full autonomy with obedience to currency issue. currentness in Hong Kong is issued by the government and three local anesthetic banks ( HSBC, Bank of China and Standard Chartered ) under the supervision of the Hong Kong Monetary Authority, which was an semi-independent public body established in the early 1990s to regulate banks and pull off exchange funds and serves until now the territory ‘s de facto “ cardinal bank “. [ 23 ] Banknotes are printed by Hong Kong Note Printing Limited. A bank can issue a Hong Kong dollar entirely if it has the equivalent substitution in US dollars on deposition. The currentness dining table system ensures that Hong Kong ‘s integral monetary infrastructure is backed with US dollars at the linked substitution rate. The resources for the bet on are kept in Hong Kong ‘s central fund, which is among the largest official reserves in the world. Hong Kong besides has huge deposits of US dollars, with official foreign currency reserves of US $ 361 billion as of March 2016. [ 24 ] In a address addressing the issue of who determines the monetary policy in Hong Kong on 13 May 2002, Tony Latter, in the military position of the Deputy Chief Executive of the Hong Kong Monetary Authority ( HKMA ), contended that the Financial Secretary in concert with the HKMA in the Hong Kong SAR Government were creditworthy for that. He acknowledged the heavy and lead charm of the Federal Reserve of the United States on Hong Kong ‘s monetary policy under the currentness peg, but argued that “ It was Hong Kong ‘s choice, and we do not require any license from Washington or New York to continue or discontinue it ”. [ 25 ] As of 18 May 2005, in addition to the lower undertake restrict, a new amphetamine guaranteed limit was set for the Hong Kong dollar at HK $ 7.75 to the US dollar. The lower specify has been lowered from 7.80 to 7.85 ( by 100 pips per week from 23 May to 20 June 2005 ). [ 26 ] The Hong Kong Monetary Authority indicated this move is to narrow the gap between the interest rates in Hong Kong and those of the United States. A far calculate of allowing the Hong Kong dollar to trade in a crop is to avoid the HK dollar being used as a proxy for bad bets on a renminbi reappraisal .

terminology [edit ]

Chinese Yale (Cantonese) Pinyin (Mandarin) English
Formal currency name 港元

港幣

góng yùn / góng bàih gǎngyuán / gǎngbì Hong Kong dollar
Formal unit name :1
Formal unit name :

1

10

Formal unit name :

1

100

or

yùn
hòu
sīn
yuán
háo
xiān
dollar
dime
cent
Other unit names :1
Other unit names :

1

10

Other unit names :

1

100

mān
gok
fān
wén
jiǎo
fēn
dollar
dime
cent

In ball Cantonese, the 圓 or 元 ( yue yale university : yùn ) character is used. In informal Cantonese, 蚊 ( yue yale : mān ) is used. The use of the character 蚊 ( mān ) originate from the tone change of the currency denomination used in China in imperial times 文 ( yue yale university : màn ), which was the head denomination until the introduction of the yuan in the former nineteenth hundred. The dollar is divided into 100 cents, with the character 仙 ( yue yale : sīn, a transliteration of “ penny ” ) used on coins and in informal Cantonese. however, 仙 is now only used in the lineage market, as now it no longer has a note or coin form due to its small value, and is no long used in regular cash transactions. The total of 10 cents is called 1 hou ( 毫 ) in Cantonese. To express prices in cozy Cantonese, for case HK $ 7.80, the phrase is 七個八 ( yue yale : chāt go baat ; illuminated. ‘seven units eight ‘ ) ; in fiscal terms, where integer values in cents exist, e.g., HK $ 6.75, the phrase is 六個七毫半 ( yue yale university : luhk go chāt hòu bun ; alight. ‘six units and seven dime bag half ‘ ; fives in cents is normally expressed as “ half ”, unless followed by another five, such as 55 cents when preceded by a dollar value ) ; $ 7.08 is 七蚊零八仙 ( yue yale university : chāt mān lìng baat sīn ; light. ‘seven dollars zero eight cents ‘ ) .

slang terms [edit ]

In Hong Kong, the following are gull terms used to refer to assorted amounts of money :

Chinese name Cantonese Yale Romanization Value Meaning

辰砂

sànsā cents Rarely used; lit. cinnabar, ground (therefore small-size) which is used in Chinese medicine

斗零

dáulíng 5¢ coins lit.’’ dram; the weight of the coin, approximately 1.37 g; 5¢ is no longer in circulation

大餅

daaihbéng $1 lit. big cracker; refers to its circular shape

草/兜/條

chóu/dāu/tíu $10 lit. grass/bowl/stripe; slang terms

青蟹

chēngháaih $10 lit. green crab; refers to the colour of the old style banknotes

花蟹/公仔紙

fāháaih / gōngjáijí $10 lit. flowery crab, colourful paper; refers to the colour of the new style banknotes

䊆糈/嚿水

gauhséui $100 lit. a lump of water; “water” stands for money in Cantonese

紅底/紅衫魚

hùngdái / hùngsāamyú $100 lit. red underwear, red snapper; refers to the red colour of the notes

大牛

daaihngàu $500 lit. big bull; refers to a picture of a bull on the note in pre-war

金牛

gāmngàu $1,000 lit. golden bull; refers to the gold colour of the notes

dung $1,000 lit. building; uncommon slang term

pèi $10,000 lit. skin; slang term

雞嘢

gāiyéh $10,000 lit. chicken stuff; uncommon slang term, can also mean $1

béng $10,000 lit. cracker; uncommon slang term

kàu $1,000,000 lit. ball; slang term, usually used in buying stocks

máh $1,000,000,000 lit. yard

Some of these terms are besides used by overseas taiwanese to refer their local currency. A slang term in English sometimes used for the Hong Kong dollar is “ Honkie ”. [ 27 ]

Coins [edit ]

In 1863, 1-mil ( 1⁄10-cent ), 1-cent and 10-cent coins were introduced, followed in 1866 by 5-cent and 20-cents, half-dollar and 1-dollar. The 1-mil and 1-cent were struck in bronze, with the 1 mil a hole coin. The remaining coins were struck in silver. output of the 1-mil ended in 1866, whilst that of the half-dollar and 1-dollar ceased in 1868, with lone the half-dollar ( now with the denomination given as 50 cents ) resuming production in 1890. output of all silver coins was suspended in 1905, lone concisely resumed in 1932 and 1933 for the production of 5-cent coins. In 1934, the last 1-cent coins were issued, but the last mint was 1941. These were not issued because the japanese sank a ship carrying 1-cent coins bound for Hong Kong in the second base World War. The come year ( 1935 ), cupro-nickel 5 and 10 cents were introduced, replaced by nickel in 1937 and nickel-brass between 1948 and 1949. Copper-nickel 50 cents were issued in 1951 and foremost bore the name “ fifty cents ” in both Chinese and English, but these were changed to nickel-brass in 1977. In 1960, cupro-nickel 1-dollar coins were introduced, these were then reduced in size in 1978. They were followed in 1975 by nickel-brass 20 cents and cupro-nickel 2-dollar mint ( both scallop shaped ), and in 1976 by decagonal, cupro-nickel 5-dollar coin, changed to a round thick shape in 1980. The 5-cent mint was last issued in 1979, but stopping point strike in 1988. In 1994, a bimetal 10-dollar coin was introduced. Starting in 1993, prior to the constitution of the HKSAR, coins with Queen Elizabeth II ‘s portrait were gradually withdrawn from circulation. Most of the notes and coins in circulations feature Hong Kong ‘s Bauhinia bloom or other symbols. Coins with the Queen ‘s portrayal are still legal tender and can be seen, but these are lento being phased out. however, most however remain in legal tender and are in circulation. Because the redesign was highly sensitive with esteem to political and economic reasons, the designing process of the new coins could not be entrusted to an artist but was undertaken by Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, himself who found in the Bauhinia the requested “ politically impersonal design ” and did a secret “ scissors and spread job ”. [ 28 ] In early 1997, to commemorate Hong Kong ‘s transfer of sovereignty from Britain to the PRC, the politics issued a new commemorative coin put which depicted taiwanese cultural themes and Hong Kong ‘s landmarks and 19 and 97, marking the year 1997, on each side of the designs. As of today, coins in denominations of HK $ 10, HK $ 5, HK $ 2, HK $ 1, 50 cents, 20 cents and 10 cents are issued by the Hong Kong Monetary Authority on behalf of the Government of Hong Kong .

Bauhinia Series (since 1993)
Value Obverse Reverse Diameter Mass Edge Composition first year issue date
10-cent 17.5 mm 1.85 g plain brass-plated steel 1993 May 1994
20-cent 18.0-19.0 mm 2.59 g scalloped October 1993
50-cent 22.5 mm 4.92 g milled
HK$1 25.5 mm 7.1 g milled cupronickel 1993 October 1993
HK$2 26.3-28.0 mm 8.41 g scalloped January 1993
HK$5 27.0 mm 13.5 g milled with lettered middle groove
HK$10 24.0 mm 11.0 g alternate plain & milled cupronickel ring, brass center 1993 November 1994

Banknotes [edit ]

The issue of Hong Kong dollar notes is governed today by the Hong Kong Monetary Authority ( HKMA ), the governmental currentness circuit board of Hong Kong. Under license from the HKMA, three commercial banks issue their own banknotes for general circulation in the region. They are Hongkong and Shanghai Banking Corporation Limited ; the Bank of China ( Hong Kong ) Limited ; and the Standard Chartered Bank ( Hong Kong ) Limited. Notes are besides issued by the HKMA itself. In most countries of the populace the issue of banknotes is handled entirely by a individual cardinal deposit or politics. The arrangements in Hong Kong are unusual but not alone ; a comparable organization is used in the United Kingdom, where seven banks write out banknotes. As of nowadays, the three commercial banks, HSBC, Bank of China and Standard Chartered issue their own designs of banknotes in denominations of HK $ 20, HK $ 50, HK $ 100, HK $ 500 and HK $ 1,000, with all designs being exchangeable to the other in the lapp denomination of bill. While alone the HK $ 10 bill is issued entirely by Hong Kong Monetary Authority on behalf of the Government of Hong Kong, which in sum makes up the bill circulation musical arrangement to four different note issuers. In 1845, the first individual bank, the Oriental Bank, was founded. however, banknotes were not produced until the 1860s, when the Oriental Bank, the Chartered Bank of India, Australia and China and the Hong Kong and Shanghai Banking Company began issuing notes. Denominations issued in the 1860s and 1870s included 1, 5, 10, 25, 50, 100 and 500 dollars. These notes were not accepted by the Treasury for payment of politics dues and taxes, although they were accepted for use by merchants. 25 dollar notes did not survive beyond the conclusion of the nineteenth century, whilst the 1-dollar notes ( entirely produced by the HSBC ) were issued until 1935. Under the Currency Ordinance of 1935, banknotes in denominations of 5 dollars and above issued by the three authorised local banks, the Mercantile Bank of India Limited, the Chartered Bank of India, Australia and China and the Hong Kong and Shanghai Banking Corporation, were all declare legal tender. The government took over production of 1 dollar notes. In 1941, the government introduced notes for 1 penny, 5 cents and 10 cents ascribable to the difficulty of transporting coins to Hong Kong caused by the second World War ( a ship carrying 1941 1-cent coins was sink, making this unissued coin identical rare ). Just before the japanese occupation, an hand brake issue of 1 dollar notes was made dwell of overprint Bank of China 5 yuan notes. In 1945, paper money production resumed basically unaltered from before the war, with the government issuing 1 penny, 5 cents, 10 cents, and 1-dollar notes, and the three banks issuing 5, 10, 50, 100 and 500-dollar notes. 1-dollar notes were replaced by coins in 1960, with merely the 1-cent note issued by the government after 1965. In 1975, the HK $ 5 notes were replaced by coins, whilst HK $ 1,000 notes were introduced in 1977. The Mercantile Bank was absorbed by the HSBC in 1978 and ceased issuing notes. In 1985, HK $ 20 notes were introduced, whilst, in 1993, HK $ 10 coins were introduced and the banks stopped issuing HK $ 10 notes. In 1994 the HKMA gave agency to the Bank of China to issue notes. After a less-than-successful test from 1994 to 2002 to move the HK $ 10 denomination from the bill format ( issued by the banks ) to the mint format ( Government-issued ), HK $ 10 notes are presently the entirely appellation issued by the HKMA, having acquired the note printing plant at Tai Po from the De La Rue Group of the UK on behalf of the Government. These notes were printed in newspaper in 2002 and in polymer since 2007. All older HK $ 10 banknotes, although rare and being phased out, remain legal tender. The latest series of banknotes was issued starting in 2018. commemorative banknotes have besides been issued celebrating the note-issuing banks ‘ anniversaries arsenic well as the Olympic Games held in Beijing in 2008 and 2022 .

Economics [edit ]

Linked exchange pace organization [edit ]

HKD/USD exchange rate since 1990 Since 1983, the linked exchange rate system is a unique type of substitute rate government used for the Hong Kong dollar to be pegged with the United States dollar at a fixed rate of HK $ 7.80 = US $ 1. In this alone linked exchange rate system, the Hong Kong Monetary Authority ( HKMA ) authorises the three note-issuing banks ( HSBC, Bank of China and Standard Chartered ) to issue new banknotes provided that they deposit an equivalent value of United States dollars with the HKMA. In exercise, in the unique linked change rate arrangement, the exchange rate of HK $ 7.80 = US $ 1, is rigorously controlled by the Hong Kong Monetary Authority in the extraneous exchange market by controlling supply and demand of Hong Kong dollars in order to influence the exchange rate being fixed. By this placement the HKMA guarantees to exchange United States dollar into Hong Kong dollars and frailty versa, at the rate of 7.80. When the marketplace rate is below 7.80, the banks will convert United States dollar for Hong Kong dollars from the HKMA, Hong Kong dollars provision will increase, and the grocery store rate will climb back to 7.80. The lapp mechanism besides works when the market pace is above 7.80, and the banks will convert Hong Kong dollars for United States dollars. By this arrangement, the Hong Kong dollar is backed by one of the populace ‘s largest foreign exchange reserves, which is over 7 times the sum of money supplied in circulation or about 48 % of Hong Kong dollar M3 at the end of April 2016. [ 30 ]

Renminbi pin consider [edit ]

Following the Internationalization of the renminbi and the inclusion body of the Renminbi in the special draw rights, there has been debates to peg the Hong Kong dollar with the Renminbi, alternatively of the United States dollar. Studies shows that, if the Hong Kong dollar were to be re-pegged to the Renminbi, it would need over 2 trillion Renminbi worth of assets to replace the HKMA ‘s US $ 340 billion in foreign reserves as of 2015, which exceeds the amount of existing Renminbi assets in Hong Kong ‘s offshore market. furthermore, according to figures from the HKMA as of the end of 2014, Renminbi deposits and certificates of deposits stood at 1.158 trillion Renminbi, while great Renminbi bonds amounted to 381 billion and Renminbi-denominated loans stood at 188 billion. [ 31 ] early studies shows, while the Hong Kong ‘s fiscal and economic links are increasingly dominated by mainland China, and previous concerns about the openness of China ‘s capital report are lento receding, if China continues to open its capital account, the peg could shift from United States dollar to renminbi. [ 32 ] however, in January 2016, the volatility in the Renminbi and China ‘s fiscal markets expanded to Hong Kong ‘s markets and its currency. Renminbi offshore overnight borrowing pace, CNH HIBOR, soared to 66.8 % on 12 January after People ‘s Bank of China – China ‘s cardinal savings bank ( PBOC ) intervened in the attempt of squeezing out Renminbi short speculations by tightening fluidity at Hong Kong commercial banks. The PBOC ‘s move at the offshore market, coupled with another plunge in chinese stocks, has led to investors ’ fears that the Hong Kong Dollar may be de-pegged from the US Dollar in the foreseeable future. In response to the marketplace speculation, Hong Kong Monetary Authority said on 27 January that the regulator will protect Hong Kong dollar ‘s linked exchange rate government. Yet, many investors no long consider Hong Kong as a condom haven as they once had given increasing fiscal influence by mainland China. As Hong Kong ‘s fiscal markets are highly impacted by mainland China, the Renminbi exchange rate a well as China ‘s fairness market remain in a state of high volatility and continues to weigh on Hong Kong markets and the Hong Kong dollar. [ 33 ]

Exchange rates [edit ]

current exchange rates [edit ]

historical exchange rates [edit ]

History of Hong Kong’s Exchange Rate System[34]
Period Exchange rate regime Features
1863–1935 Silver Standard Silver dollars as legal tender
December 1935 – June 1972 Sterling exchange Standard exchange rate:

  • £1:HK$16 (December 1935 – November 1967)
  • £1:HK$14.55 (November 1967 – June 1972)
July 1972 – November 1974 Fixed exchange rate against the US dollar Exchange rate:

  • US$1:HK$5.650 (June 1972 – February 1973)
  • US$1:HK$5.085 (February 1973 – November 1974)
November 1974 – October 1983 Free floating Exchange rates on selected days:

  • US$1:HK$4.965 (25 November 1974)
  • US$1:HK$9.600 (24 September 1983)
1983 – present Linked exchange rate system
  • US$1:HK$7.80 (1983–1998)

( for exit and redemption of Certificates of Indebtedness )

  • US$1:HK$7.75 (1998–2005)

( The HKMA undertake to convert the HK dollars in accredited banks ’ clearing accounts maintained with
the HKMA into US dollars at the fixed exchange rate of HK $ 7.75 to US $ 1. The rate moved to 7.80 by
0.0001 ( 1 spot ) each calendar day starting from 1 April 1999 ending 12 August 2000. )

  • US$1:HK$7.75–7.85 (May 2005 onwards)

HKMA set up upper berth and lower guaranteed limit since 18 May 2005

See besides [edit ]

Numismatics [edit ]

Notes [edit ]

  1. ^ US $) and another bought (€). Therefore each trade is counted twice, once under the sold currency ($) and once under the bought currency (€). The percentages above are the percent of trades involving that currency regardless of whether it is bought or sold, e.g. the U.S. Dollar is bought or sold in 88% of all trades, whereas the Euro is bought or sold 32% of the time. The total sum is 200 % because each currency trade wind constantly involves a currency pair ; one currentness is sold ( e.g. ) and another buy ( € ). therefore each trade is counted doubly, once under the sell currentness ( $ ) and once under the buy currency ( € ). The percentages above are the percentage of trades involving that currentness careless of whether it is bought or sold, e.g. the U.S. Dollar is bought or sold in 88 % of all trades, whereas the Euro is bought or sold 32 % of the meter .

References [edit ]

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