Hong Kong Dollar (HKD)

Wall Street Journal  Jun 24  Comment 
Exchange rates remained stable in Hong Kong in the wake of a U.K. vote to leave the European Union, the chief executive of the city’s foreign-exchange regulator said.
Japan Today  Jun 22  Comment 
Hong Kong has overtaken Angola's capital to become the costliest city in the world for expats, Mercer's annual survey said Wednesday. After topping the Cost of Living report for three consecutive years, Luanda was pipped by the Asian city in...
Mondo Visione  Feb 23  Comment 
Please be advised that pursuant to Exchange Rule 617(d) and HKCC Rule 402, the Exchange and the Clearing House have determined that with effect from the commencement of trading on Thursday, 25 February 2016, the margin levels of the following...
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 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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