Hong Kong Dollar (HKD)

QUOTE AND NEWS
FX Street  Jul 9  Comment 
The Hong Kong Dollar (HKD) isn’t a currency we often talk about at FOREX.com as it is pegged to the... For more information, read our latest forex news and reports.
MarketWatch  Jul 7  Comment 
A local airline is considering what would be Hong Kong's first-ever initial public offering to offer shares in both Hong Kong dollars and Chinese yuan , The Wall Street Journal reported Monday. Hong Kong Airlines is looking into an IPO in the...
MarketWatch  Jul 2  Comment 
For the first time since December 2012, Hong Kong has intervened in the foreign-exchange market to defend its currency peg to the U.S. dollar, Bloomberg News reported Tuesday. With demand for the Hong Kong dollar rising, the Hong Kong Monetary...
Wall Street Journal  Jul 1  Comment 
Demand for the Hong Kong dollar has risen recently, partly because of increased corporate demand for commercial activities, the Hong Kong Monetary Authority said.
SeekingAlpha  Apr 24  Comment 
By Daniel Kim: (Editors' Note: AGTech trades on the Hong Kong Stock Exchange, symbol 8279, with average daily volume of HK$29 million.) The Chinese lottery market is currently undergoing massive structural change. The primary driving force...
Wall Street Journal  Mar 14  Comment 
Hong Kong property tycoon Cheng Yu-tung's New World Development Ltd. plans to take its China unit private for 18.6 billion Hong Kong dollars.
TechCrunch  Mar 12  Comment 
Alibaba has agreed to spend HKD $6.24 billion (about USD $804 million) for a 60% stake in TV and film producer ChinaVision Media Group. The purchase will allow Alibaba, which already dominates China's e-commerce market, to boost its digital...




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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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