The fixed exchange rate system seeks to maintain parity with the USD within a tight range, allowing HKD note-issuing banks to issue new banknotes only when they deposit an equivalent value of U.S. dollars with the authority. Financially, the currency peg was designed not to require the Bank of England to lend its reserves to maintain Hong Kong’s currency peg. By 1935, Hong Kong was the only country left on the silver standard. During Japanese occupation the Dollar was temporarily suspended, replaced by the Japanese Military Yen. In 1945, the Hong Kong was re-issued, pegged to the British Pound at a rate of 16 HKD to 1 GBP. In 1972, the Hong Kong Dollar re-pegged to the US Dollar, with the rate changing multiple times over the next few decades.

  1. HKD is the abbreviation for the Hong Kong dollar, the official currency of Hong Kong, which is one of the most traded currencies globally.
  2. Production of the 1-mil ended in 1866, whilst that of the half-dollar and 1-dollar ceased in 1868, with only the half-dollar (now with the denomination given as 50 cents) resuming production in 1890.
  3. 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 U.S. dollar and the Canadian dollar.
  4. However, the HK$10 banknote and all coins are issued by the Government of Hong Kong.
  5. They are Hongkong and Shanghai Banking Corporation Limited; the Bank of China (Hong Kong) Limited; and the Standard Chartered Bank (Hong Kong) Limited.
  6. The HKMA holds one of the world’s largest currency reserves in relation to its economy.

If, and when, the HKD hits either the upper or lower bound, the HKMA, which acts as the de facto central bank, intervenes to stabilize the currency. In 1975, the HK$5 notes were replaced by coins, whilst HK$1,000 notes were introduced in 1977. The Mercantile Bank was absorbed by the HSBC in 1978 and ceased issuing notes. In 1985, HK$20 notes were introduced, whilst, in 1993, HK$10 coins were introduced and the banks stopped issuing HK$10 notes. In 1994 the HKMA gave authority to the Bank of China to issue notes. Commemorative banknotes have also been issued celebrating the note-issuing banks’ anniversaries as well as the Olympic Games held in Beijing in 2008 and 2022.

They were followed in 1975 by nickel-brass 20 cents and cupro-nickel 2-dollar coin (both scallop shaped), and in 1976 by decagonal, cupro-nickel 5-dollar coin, changed to a round thicker shape in 1980. In 1863, 1-mil (1⁄10-cent), 1-cent and 10-cent coins were introduced, followed in 1866 by 5-cent and 20-cents, half-dollar and 1-dollar. The 1-mil and 1-cent were struck in bronze, with the 1 mil a holed coin. Production of the 1-mil ended in 1866, whilst that of the half-dollar and 1-dollar ceased in 1868, with only the half-dollar (now with the denomination given as 50 cents) resuming production in 1890. Production of all silver coins was suspended in 1905, only briefly resumed in 1932 and 1933 for the production of 5-cent coins. In 1934, the last 1-cent coins were issued, but the last minting was 1941.

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Several countries use the U.S. dollar as their official currency, and many others allow it to be used in a de facto capacity. Before then, various foreign currencies had been used and continued to be used even after the HKD’s inception. The Hong Kong dollar was outlawed by the Japanese puppet government in 1943 and reinstated in 1945 after World War II. Hong Kong is now in sole control of the printing and administration of its currency, which is controlled by the Hong Kong Monetary Authority (HKMA). In early 1997, to commemorate Hong Kong’s transfer of sovereignty from Britain to the PRC, the government issued a new commemorative coin set which depicted Chinese cultural themes and Hong Kong’s landmarks and 19 and 97, marking the year 1997, on each side of the designs.

The issue of Hong Kong dollar notes is governed today by the Hong Kong Monetary Authority (HKMA), the governmental currency board of Hong Kong. Under licence from the HKMA, three commercial banks issue their own banknotes for general circulation in the region. They are Hongkong and Shanghai Banking Corporation Limited; the Bank of China (Hong Kong) Limited; and the Standard Chartered Bank (Hong Kong) Limited. In most countries of the world the issue of banknotes is handled exclusively by a single central bank or government. The arrangements in Hong Kong are unusual but not unique; a comparable system is used in the United Kingdom, where seven banks issue banknotes. The linked exchange rate system is designed to stabilize the exchange rate between the Hong Kong dollar (HKD) and the United States dollar (USD).

HKD is the abbreviation for the Hong Kong dollar, the official currency of Hong Kong, which is one of the most traded currencies globally. The HKD is used in both Hong Kong and the neighboring territory of Macau, whose currency, the pataca, is pegged to the Hong Kong dollar. Established in 1993, the Hong Kong Monetary Authority is the central bank of the island and acts to control inflation and maintain the stability of the Hong Kong dollar (HKD) and of the banking sector through its monetary policy.

The HKD is the ninth most traded currency, and because it is pegged to the U.S. dollar, with upper and lower limits, it does not exhibit any strong unique correlations with other currencies. As of today, coins in denominations of HK$10, HK$5, HK$2, HK$1, 50 cents, 20 cents and 10 cents are issued by the Hong Kong Monetary Authority on behalf of the Government of Hong Kong. The U.S. dollar is the currency most used in international transactions.

Historical Exchange Rates For Hong Kong Dollar to United States Dollar

These were not issued because the Japanese sank a ship carrying 1-cent coins bound for Hong Kong in the Second World War. The following year (1935), cupro-nickel 5 and 10 cents were introduced, replaced by nickel https://www.topforexnews.org/brokers/compare-fxcm-vs-oanda-for-fees-safety-and-more/ in 1937 and nickel-brass between 1948 and 1949. Copper-nickel 50 cents were issued in 1951 and first bore the name “fifty cents” in both Chinese and English, but these were changed to nickel-brass in 1977.

Convert from Hong Kong Dollar (HKD) to United States Dollar (USD)

In British Weihaiwei, the Hong Kong dollar circulated jointly with the Chinese https://www.day-trading.info/landfx-vs-abshire-smith-who-is-better-in-2021/ yuan from 1914 to 1930, when Weihaiwei was returned to the Republic of China.

In 1972, the HK dollar was pegged to the U.S. dollar at a rate of HK$5.65 to $1 USD. Since then, it has remained pegged to the dollar, with the HKMA adjusting 5 key strategies for an effective affiliate onboarding its value from time to time. The Hong Kong dollar has been pegged to a narrow trading band, which currently ranges between HK$7.7500 and HK$7.8500 per USD.

Linked exchange rate system

However, the HK$10 banknote and all coins are issued by the Government of Hong Kong. However, banknotes were not produced until the 1860s, when the Oriental Bank, the Chartered Bank of India, Australia and China and the Hong Kong and Shanghai Banking Corporation began issuing notes. Denominations issued in the 1860s and 1870s included 1, 5, 10, 25, 50, 100 and 500 dollars. These notes were not accepted by the Treasury for payment of government dues and taxes, although they were accepted for use by merchants. 25 dollar notes did not survive beyond the end of the 19th century, whilst the 1-dollar notes (only produced by the HSBC) were issued until 1935.

Our currency rankings show that the most popular Hong Kong Dollar exchange rate is the HKD to USD rate. The Hong Kong dollar is made up of 100 cents and is often shown with the HK$ prefix to differentiate it from other dollar-denominated currencies. Hong Kong is a leading global financial center and its economy is considered to be the freest in the world. As of 18 May 2005, in addition to the lower guaranteed limit, a new upper guaranteed limit was set for the Hong Kong dollar at HK$7.75 to the US dollar. The lower limit has been lowered from 7.80 to 7.85 (by 100 pips per week from 23 May to 20 June 2005).[23] The Hong Kong Monetary Authority indicated this move is to narrow the gap between the interest rates in Hong Kong and those of the United States.

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 U.S. dollar and the Canadian dollar. During the 19th century, Hong Kong used a variety of foreign currencies such as Indian Rupees, Spanish Dollars, Mexican Pesos, and Chinese coins for daily transactions. As a British colony, an attempt to standardize the currency system was made in 1825 by introducing Sterling coins. This currency, however, proved to be unpopular and foreign coins continued to circulate.