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Hong Kong Dollar (HKD)

QUOTE AND NEWS
Economic Report: Hong Kong unveils relief measures in budget
MarketWatch  Feb 27  Comment 
Hong Kong’s finance minister pledges modest income tax breaks and waivers on property rates despite the government’s ballooning fiscal reserves, in a warning against drawing heavily on the city’s coffers in a weak economy.
Hong Kong Monetary Authority intervenes to defend HK dollar peg
The Straits Times  Oct 31  Comment 
October 31, 2012 6:40 PM HONG KONG (REUTERS) - The Hong Kong Monetary Authority (HKMA) stepped into the currency market again on Wednesday by selling HK$2.7 billion (S$424 million) as the local currency repeatedly hit the top end of its trading...
Galaxy Entertainment Q3 Pretax Earnings Up 46%
Benzinga  Oct 25  Comment 
Galaxy Entertainment Group Ltd (OTC: GXYEY) reported a surge in its unaudited Q3 earnings. Galaxy Entertainment's quarterly adjusted earnings before interest, taxes, depreciation and amortization jumped 46% y/y to 2.6 billion Hong Kong dollars...
VIDEO: Time to end the HK dollar link?
BBC News  Oct 25  Comment 
Hong Kong has always had some form of linked foreign exchange regime, but some people are now asking if it is time to get rid of it.
The Fed Pulling A George Soro on HK Currency?
EconMatters  Oct 24  Comment 
By  Bruce Krasting   The Hong Kong Monitory Authority (HKMA) was forced to intervene in the currency market again Monday night. This is the second time in a week that the upper end of the USDHKD peg has been tested by...
It's Ben Bernanke And Bill Ackman Versus The Hong Kong Monetary Authority
Clusterstock  Oct 23  Comment 
The Hong Kong Monetary Authority (HKMA) was forced to intervene in the currency market again last night. This is the second time in a week that the upper end of the USDHKD peg has been tested by speculators.  There are two aspects to the attack...
HKD intervention: it could get ugly
Euromoney  Oct 22  Comment 
The Hong Kong Monetary Authority (HKMA) has intervened for the first time in three years to keep the HKD in its trading band against the dollar, a move that should lend further support to the euro but could be the start of the unravelling of the...
Hong Kong Intervenes Against HK Dollar Rise
The Contrary Investing Report  Oct 21  Comment 
Hong Kong Monetary Authority (HKMA) intervened yesterday against the recent rise of the HK dollar.  The HK dollar is pegged at a ratio of 7.8 to the US dollar, but is allowed to trade in a range from 7.75 to 7.85.  The top of the range was hit,...
Intervention Watch for Strong Hong Kong Dollar
Wall Street Journal  Oct 19  Comment 
Hong Kong’s dollar is close to the strong end of its trading band with the U.S. dollar, putting traders on watch for intervention by the de facto central bank, an action last taken two years ago.




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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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