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Hong Kong - Currency
As a dollar, it is subdivided into 100 cents. In Cantonese, 10 cents is called 1 houh. Fives in cents is usually expressed as "half.” There are other slang terms in Hong Kong that are used to refer to different denominations. For instance, $10,000 can be referred to as “skin” while $10 might be called “grass”, thanks to its color.
There wasn’t a local currency in circulation when Hong Kong was first established as a free trading port. Instead, a variety of currencies were in circulation including Chinese cash coins, Indian rupees, and Spanish and Mexican reales.
The Royal Mint in London started issuing a special coinage in Hong Kong in 1863. This dollar system had silver dollar coins and half dollar coins that were similar to the Mexicans ones that were already in circulation. A local mint was established on Causeway Bay. The Hong Kong mint was shut down in 1868, however, since the Chinese did not care for the Hong Kong dollars. However, during the 1860s, banknotes from the Chartered Bank of India, Australia, and China and the Hong Kong and Shanghai Banking Corporation started circulating.
Only Hong Kong and China used the silver standard by 1935. During this year, both abandoned silver and started using a crawling peg to sterling which lead to the creation of a Hong Kong dollar as a distinct unit of currency. The legal tender of Hong Kong was unified in 1937. By 1939, the dollar was put on a fixed peg of 16 dollars = 1 pound.
During the Japanese Occupation, the yen was the only legal tender starting in 1943. After the liberation, the issue of local currency was resumed by the Hong Kong government. In September 1945, all of the surviving yen notes became void.
In May 2005, an upper guaranteed limit was set for the Hong Kong dollar at 7.75 to the American dollar. The lower limit was lowered from 7.80 to 7.85 The Hong Kong Monetary Authority stated that this occurred in order to constrict the gap between the interest rates in Hong Kong and those of the United States.
Hong Kong Monetary Authority
Two International Finance Centre
8 Finance Street
Tel: (852) 2878 8196
At present time, the currency in Hong Kong is issued by the government and three local banks under the supervision of the Hong Kong Monetary Authority. Banks can only issue a Hong Kong dollar only if it has the corresponding exchange in US dollars on deposit. This ensures that Hong Kong's entire monetary base is backed with US dollars. The resources for this are kept in Hong Kong's exchange fund. Right now, that exchange fund is one of the biggest in the world.
Banknotes can be found in denominations of 10, 10, 50, 100, 500, and 1,000. The images on the denominations might vary. For instance, in the 2010 series, the HK$20 under the Hong Kong and Shanghai Banking Corporation features the Mid-Autumn Festival. The Bank of China series, however, features Repulse Bay as inspiration. Even though the detonations are the same amount, the images on the checks can vary. For that reason, knowing the colors of the denominations can be helpful.
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