Mini Hong Kong Dollar

Mini Hong Kong Dollar

In 1846, the Oriental Bank, the first bank in Hong Kong, started circulating Hong Kong dollar banknotes that could be exchanged for silver dollars. As a result, the city received its own paper money for the first time. Over the next several years, subsidiary coins experienced a steady increase in demand, and in 1863, the Hong Kong Government started placing orders for coins denominated in 10 cents or less from Britain. Three Chinese note-issuing banks (HSBC, Bank of China, and Standard Charted) are authorized to issue Hong Kong dollars, subject to conditions laid out by the Hong Kong government. Banknotes then run through a government exchange fund that holds U.S. dollars in reserves and records all transactions in the general accounts of the two currencies.

Its most frequently used banknotes are the HK$20, HK$50, HK$100, HK$500 and HK$1000. The currency board arrangement is such a built-in counterbalancing mechanism. The de-facto Central Bank of HK, Hong Kong Monetary Authority (HKMA), fixes the exchange rate between HKD and USD by means of a Convertibility Undertakings (HKMA, 2018). By means of the undertakings, arbitrageurs shall be attracted to counterbalance the trading market forces.

The Basic Law of Hong Kong and the Sino-British Joint Declaration provides that Hong Kong retains full autonomy with respect to currency issuance. Currency in Hong Kong is issued by the government and three local banks (HSBC, Bank of China and Standard Chartered) under the supervision of the territory’s de facto central bank, the Hong Kong Monetary Authority.


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 Company 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.

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The three commercial banks, HSBC, Bank of China and Standard Chartered issue their own designs of banknotes in denominations of HK$20, HK$50, HK$100, HK$500 and HK$1000, with all designs being similar to one another in the same denomination of banknote. However, the HK$10 banknote and all coins are issued by the Government of Hong Kong. USDHKD is the abbreviation for the US dollar and the Hong Kong dollar. Exotics are pairs that are thinly traded in the foreign exchange markets and are not widely used in the global markets.


  • The news and information contained on this site is by no means investment advice.
  • In response to the market speculation, Hong Kong Monetary Authority said on 27 January that the regulator will protect Hong Kong dollar’s linked exchange rate regime.
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Under capital control laws, a bank can only use a HK dollar if it has the equivalent value of U.S. dollars on deposit. Under the licence from Trade GBP/PLN the Hong Kong Monetary Authority, three commercial banks are licensed to issue their own banknotes for general circulation in Hong Kong.

Currencies Pegged To The Hong Kong Dollar

About halfway through Hong Kong’s transition period, the jurisdiction’s coinage again began undergoing changes. The Hong Kong Monetary Authority was created in 1993 through the merger of the Office of the Commissioner of Banking and the Office of the Exchange Fund. That same year, a series of new coins, which featured a picture of the bauhinia, was issued. This addition was expanded upon in 1994, when the Bank of China supplied its first issue of Hong Kong banknotes and the jurisdiction’s government started issuing HK$10 coins.

Here, USD is referred to as base currency and HKD as the quote currency. 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 its value from time to time. The Hong Kong dollar has been pegged to a narrow trading band, which currently ranges from HK$7.7500 and HK$7.8500 per USD.

Investors are betting a change of the USD-HKD Peg?


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 1845, the first private bank, the Oriental Bank, was founded.

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