Hong Kong Dollar (HKD)

QUOTE AND NEWS
SeekingAlpha  48 min ago  Comment 
The Economic Times  Jan 29  Comment 
TVS Motor company said its Board of Directors have approved in-principle an investment not exceeding 10 million Hong Kong Dollars in Hong Kong.
SeekingAlpha  Jan 28  Comment 
The Hindu Business Line  Jan 26  Comment 
China's state media has warned billionaire investor George Soros against betting on falls in the value of the Chinese yuan and Hong Kong dollar , amid widespread worries over the health of world's se...
Wall Street Journal  Jan 20  Comment 
Hong Kong will keep soldiering on with the dollar peg despite the pain it may cause investors.
SeekingAlpha  Jan 20  Comment 
Financial Times  Jan 19  Comment 
After weathering many events in the past 3 decades, the system is coming under pressure
The Economic Times  Jan 19  Comment 
Hong Kong's dollar fell to fresh four-year lows in opening trades on Tuesday, as the currency continued its slide towards the lower end of a trading band.
The Economic Times  Jan 18  Comment 
The Hong Kong dollar posted its biggest fall in 12 years on Thursday as volatility, capital outflows and spiralling offshore yuan interest rates spilled into Hong Kong's markets.
Wall Street Journal  Jan 15  Comment 
Shanghai shares entered a bear market the same day Hong Kong’s currency fell to its weakest level in over four years.




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The Hong Kong Dollar is the currency of the Chinese SAR of Hong Kong. It is denoted with a leading $, though in an international context the $ is often appended to an "HK" to distinguish the currency from other dollars. For example, within Hong Kong $48 is read "forty-eight dollars," while in an international context the same value might be written HK$48 and read "forty-eight Hong Kong dollars".

The chart at left shows the USD/HKD Currency Pair; the number of Hong Kong Dollars equivalent to 1 U.S. Dollar (USD).


Linked Exchange Rate System

Pegged exchange to US Dollar (1USD = 7.80HKD)

The linked exchange rate system of Hong Kong was launched on 17 October 1983, in reaction to a currency crisis arising from the Sino-British dispute concerning the political future of Hong Kong after 1997. The Hong Kong dollar was floating rapidly downwards, indeed plunging, in the foreign exchange market at that time, and the local authorities were desperate to find a solution to save it.

The solution, i.e. the linked exchange rate system, or simply the "link" which pegged the Hong Kong dollar to the US dollar at the rate of 7.80, was not a new invention. It was in essence a resurrection of the "currency board" scheme adopted in the territory from 1935 to 1972, with some modifications.

A bank can issue a Hong Kong dollar only if it has the equivalent exchange in US dollars on deposit. The currency board system ensures that Hong Kong's entire monetary base is backed with US dollars at the linked exchange rate. The resources for the backing are kept in Hong Kong's exchange fund, which is among the largest official reserves in the world. Hong Kong also has huge deposits of US dollars, with the 2008 estimate being at over US$ 700 billion

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