Currency - Hong Kong dollar

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Hong Kong dollar

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The Hong Kong dollar (sign: HK$; code: HKD) is the official currency of the Hong Kong Special Administrative Region. It is subdivided into 100 cents. The Hong Kong Monetary Authority is the governmental currency board and also the de facto central bank for Hong Kong and the Hong Kong dollar.

Under the licence from the Hong Kong Monetary Authority, three commercial banks are licensed to issue their own banknotes for general circulation in Hong Kong. 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$1000, with all designs being similar to the other in the same denomination of banknote. However, the HK$10 banknote and all coins are issued by the Government of Hong Kong.

As of April 2016, the Hong Kong dollar is the thirteenth most traded currency in the world. Apart from its use in Hong Kong, the Hong Kong dollar is also used in neighbouring Macau, where the Hong Kong dollar circulates alongside the Macau pataca.

When Hong Kong was established as a free trading port in 1841, there was no local currency in everyday circulation. Foreign currencies such as Indian rupees, Spanish and Mexican 8 reales, and Chinese cash coins circulated. Since 1825, it had been the policy of the British government to introduce sterling silver coinage to all of its colonies, and to this end, in 1845 the Spanish and Mexican 8 reales coins were set at a legal tender value of 4 shillings, 2 pence sterling (£). But just as in the case of the British North American colonies, the attempts to introduce the sterling coinage failed to overcome the strong local adherence to the silver Spanish dollar system.

By 1858, the British government gave up all attempts to influence the currency situation in Canada, and by the 1860s it came to the same realisation 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 coinage for use in Hong Kong within the dollar system. In 1866, a local mint was established at Cleveland Street in Causeway Bay on Hong Kong Island for the purpose of minting Hong Kong silver dollar and half dollar coins of the same value and similar likeness to their Mexican counterparts. 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 new British colonial banks, the Hong Kong and Shanghai Banking Corporation and the Chartered Bank of India, Australia and China, denominated in dollars, also began to circulate in both Hong Kong and the wider region.

In 1873, the international silver crisis resulted in a devaluation of silver against gold-based currencies. Since the silver dollars in the US and Canada were attached to a gold exchange standard, this meant that the silver dollars circulating along the China coast dropped in value as compared to the US dollar and the Canadian dollar.

By 1895, the circumstances had changed to the extent that there was now a dearth of 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 silver dollar coins. London eventually 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 dollar coin and attached it to a gold sterling exchange standard at a fixed value of 2 shillings and 4 pence. This was the point of departure as between the Hong Kong unit and the Straits unit.

By 1935, only Hong Kong and China remained on the silver standard. In that year, Hong Kong, shortly after China, abandoned silver and introduced a crawling peg 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 distinct unit of currency came into existence. The One-Dollar Currency Note Ordinance of that year led to the introduction of one-dollar notes by the government and the government acknowledged the Hong Kong dollar as the local monetary unit. It was not until 1937 that the legal tender of Hong Kong was finally unified. In 1939, the Hong Kong dollar was put on a fixed peg of HK$16 = £1 ($1 = 1s 3d).

During the Japanese occupation, the Japanese military yen were the only means of everyday exchange in Hong Kong. When the yen was first 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 yen. The yen became the only legal tender on 1 June 1943. The issue of local currency was resumed by the Hong Kong government and the authorised local banks after liberation, with the pre-war rate of HK$16 = £1 being restored. The yen was exchanged at a rate of ¥100 = HK$1. On 6 September 1945, all military yen notes used in Japanese colonies were declared void by the Japanese Ministry of Finance.

In 1967, when sterling was devalued, the dollar's peg to the pound was increased from 1s 3d to 1s 4 1⁄2d ($14.5455 = £1) although this did not entirely offset the devaluation. In 1972, 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. Between 1974 and 1983, the Hong Kong dollar floated. On 17 October 1983, the currency was pegged at a rate of HK$7.8 = US$1, through the currency board system.

Country

Hk

Hong Kong (, Hong Kong Cantonese: ), officially the Hong Kong Special Administrative Region of the People's Republic of China and commonly abbreviated as HK, is a special administrative region on the eastern side of the Pearl River estuary in southern China. With over 7.4 million people of various nationalities in a 1104 km2 territory, Hong Kong is the world's fourth most densely populated region.

Hong Kong became a colony of the British Empire after Qing Empire ceded Hong Kong Island at the end of the First Opium War in 1842. The colony expanded to the Kowloon Peninsula in 1860 after the Second Opium War, and was further extended when Britain obtained a 99-year lease of the New Territories in 1898. The entire territory was transferred to China in 1997. As a special administrative region, Hong Kong's system of government is separate from that of mainland China and its people overwhelmingly identify as Hongkongers rather than Chinese.

Language

Hong Kong dollar (English)  Dollaro di Hong Kong (Italiano)  Hongkongse dollar (Nederlands)  Dollar de Hong Kong (Français)  Hongkong-Dollar (Deutsch)  Dólar de Hong Kong (Português)  Гонконгский доллар (Русский)  Dólar de Hong Kong (Español)  Dolar hongkoński (Polski)  港元 (中文)  Hongkongdollar (Svenska)  香港ドル (日本語)  Гонконгський долар (Українська)  Хонконгски долар (Български)  홍콩 달러 (한국어)  Hongkongin dollari (Suomi)  Dolar Hong Kong (Bahasa Indonesia)  Honkongo doleris (Lietuvių)  Hongkong-dollar (Dansk)  Hongkongský dolar (Česky)  Hong Kong doları (Türkçe)  Хонгконшки долар (Српски / Srpski)  Hongkonský dolár (Slovenčina)  Hongkongi dollár (Magyar)  Hongkonški dolar (Hrvatski)  Δολάριο Χονγκ Κονγκ (Ελληνικά)  Đô la Hồng Kông (Tiếng Việt) 
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