What Currency Does Hong Kong Use?

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Ministers and officials in London tolerated Hong Kong’s situation due to its extensive trade with the People’s Republic of China (PRC) and the collusion between officials, bankers, and local business communities. The Hong Kong dollar’s floating currency system from 1974 to 1983 was a significant shift in its monetary regime. This period marked a departure from the currency board system, where the Hong Kong dollar was anchored to another currency.

You have several choices, such as inter-bank transfer, online money transfer, and international money transfer company offices. 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. 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. A further aim of allowing the Hong Kong dollar to trade in a range is to avoid the HK dollar being used as a proxy for speculative bets on a renminbi revaluation. In 1873, the international silver crisis resulted in a devaluation of silver against gold-based currencies.

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In 1960, cupro-nickel 1-dollar coins were introduced, these were then reduced in size in 1978. 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. Financially, the currency peg was designed not to require the Bank of England to lend its reserves to maintain Hong Kong’s currency peg. The PBoC’s monetary policy significantly impacts the value of the Yuan and China’s economic stability.

This dynamic was evident in 2022 and 2023 when aggressive Fed rate hikes led to capital outflows, prompting the HKMA to intervene by buying HKD to maintain the peg. The peg has faced pressure during financial crises and shifts in U.S. monetary policy. During the 1997 Asian Financial Crisis, speculators attempted to force a fxprimus review devaluation of the HKD, prompting the HKMA to raise interest rates sharply to defend the peg. More recently, as the Federal Reserve raised interest rates between 2022 and 2023 to combat inflation, Hong Kong experienced capital outflows and rising borrowing costs.

Any sizable town of a few thousand people will have ATMs available to use. The HKMA holds one of the world’s largest currency reserves in relation to its economy. She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies. In British Weihaiwei, the Hong Kong dollar circulated jointly with the Chinese yuan from 1914 to 1930, when Weihaiwei was returned to the Republic of China.

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 day trading patterns (only produced by the HSBC) were issued until 1935. London eventually acquiesced and legislation was enacted in attempts to regulate the coinage.

However, the currency began to develop its 7 trading strategies every trader should know local flare, reflecting Hong Kong’s evolving identity and “East meets West” ethos. All older HK$10 banknotes, although rare and being phased out, remain legal tender. While only the HK$10 banknote is issued solely by Hong Kong Monetary Authority on behalf of the Government of Hong Kong, which in total makes up the banknote circulation arrangement to four different note issuers. Hong Kong, as a Special Administrative Region of China, enjoys a high degree of autonomy under the “one country, two systems” principle.

The best rates are usually found withdrawing the local currency from an ATM on arrival at your destination. These will charge a commission – usually around 4% – but tend to have a better rate. HKD-denominated derivatives, including futures, options, and swaps, are actively traded for hedging and speculative purposes.

The peg is actively kept, meaning that the HKMA intervenes in foreign exchange when necessary, buying or selling Hong Kong Dollars to keep the exchange rate within the prescribed range. It may fluctuate slightly, commonly oscillating between HK$7.75 and HK$7.85 depending on global financial and economic activity. The Hong Kong dollar, the ninth most traded currency globally, is not a floating currency.

The Hong Kong Dollar (HKD) and the Chinese Yuan (CNY) serve distinct roles in their respective economies and the global financial system. The HKD’s stability, driven by its peg to the USD, supports Hong Kong’s status as an international financial hub. In contrast, the CNY’s managed float system reflects China’s economic policies and its growing influence on the global stage. Understanding the differences between these currencies is essential for navigating their impact on trade, investment, and financial markets. As both currencies continue to evolve, their roles in the global economy will remain significant, shaping the future of international finance and economic relations. The CNY’s growing role in global trade reflects China’s expanding economic influence.

• Its acceptance in international markets is tied to Hong Kong’s role as a global financial hub, with deep capital markets that attract multinational corporations, institutional investors, and financial intermediaries.
• In Hong Kong, you’ll need to know how to use the local currency called the Hong Kong dollar (HKD), how to obtain it, and how to pay for things in Hong Kong.
• In 1974, Hong Kong shifted to a free-floating exchange rate system, which remained in place until 1983.
• One of the benefits of using a reliable exchange service is that you can get a great rate every time, unlike banks and traditional providers that often mark up the exchange rate.
• Get the latest exchange rates & expert insights on Canadian Dollar to Bahamian Dollar conversions, travel, and business transactions.
• 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.

Key Facts about the Hong Kong Dollar:

I’ve also shown up in a country completely unaware of the currency they use and its exchange rate with the USD, leading to me being excessively frivolous with spending. But you will inevitably end up spending more than you would with HKD as there is typically a lack of change and more liberal exchange rates (or those with a premium). Below is a table showing the Hong Kong Dollar exchange rate with some popular currencies used by tourists traveling to Asia’s World City. The banknotes used in Hong Kong are HK$10, HK$20, HK$50, HK$100, HK$500, and HK$1,000. The HK$1000 note isn’t generally used in everyday transactions as it is the equivalent of USD 130.

USD – US Dollar

While the HKD is the only legal tender in Hong Kong, some retailers, particularly those catering to tourists, also accept Chinese yuan (CNY) and U.S. dollars (USD), though these are not officially sanctioned for general use. The Hong Kong Dollar (HKD) is a key currency in Asia, widely used for trade and investment. It plays an important role in both local commerce and international finance, making it relevant beyond Hong Kong’s borders.

Hong Kong Dollar Basics

It’s quite a funny term to describe money as it translates to ‘mosquito’. This would be more comparable to the United States’ use of ‘buck’ as slang for a dollar. Simply put, 幣 (Bái) means ‘currency’ or ‘money’, while 港 (Góng) represents ‘Hong Kong’. Hong Kong is a special administrative region (SAR) of China that has its own currency, which is called the Hong Kong Dollar. Private car and driver might be the best option if you want to do a lot of touring, business, or sightseeing in Hong Kong. A private driver or aid from an English speaking guide/interpreter is relatively inexpensive compared to Western countries and Japan.

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• She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies.
• The Hong Kong Monetary Authority intervenes when the exchange rate reaches either end of the band, selling U.S. dollars when the HKD weakens and buying them when it strengthens.
• Ministers and officials in London tolerated Hong Kong’s situation due to its extensive trade with the People’s Republic of China (PRC) and the collusion between officials, bankers, and local business communities.
• New British trade dollars were coined at the mints in Calcutta and Bombay for use in both Hong Kong and the Straits Settlements.

This system aims to stabilize the HKD’s value and ensure confidence in Hong Kong’s monetary stability. 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 between HK$7.7500 and HK$7.8500 per USD.

Xe Currency Charts

In 1974, Hong Kong shifted to a free-floating exchange rate system, which remained in place until 1983. In 1935, Hong Kong switched to a Sterling exchange rate, which remained in place until 1972. The Hong Kong dollar was initially attached to the “gold standard” of the US dollar, but the international silver crisis in 1873 resulted in a devaluation of the Hong Kong dollar. This depreciation led to the British Government allowing British trade dollars to be used in Hong Kong.

It’s one of the most recognizable and widely used currencies in Asia thanks to Hong Kong’s venerated status as a global financial hub, one that connects both the East and West. Low limits are set on how much RMB you can change to a foreign currency in a single day in China itself. ATMs can be found on almost city street, at bank offices, by supermarkets, next to many convenience stores, and in metro stations. They take international cards and have instructions in English and Chinese. Generally, people can withdraw in amounts of 300 USD or 400 USD (4,000 HKD).

Hong Kong also serves as a gateway for capital moving into and out of mainland China. The Stock Connect and Bond Connect programs allow foreign investors to access Chinese securities using HKD, bypassing certain restrictions on the mainland’s financial markets. This has made the currency a preferred choice for equity and fixed-income transactions among asset managers and hedge funds seeking exposure to Chinese markets while benefiting from Hong Kong’s regulatory protections.