Currency Of Hong Kong (Helpful Content!)

The official currency of Hong Kong is the Hong Kong dollar. Though Hong Kong is called a special administrative region of China, it is in virtually all ways an autonomous, self-governing nation. Thus, it does not use Chinese currency as is often assumed. The Hong Kong dollar is divided into 100 cents.

The Hong Kong dollar among the most traded currencies in the world despite Hong Kong’s relatively small size, and so this just goes to show the power of the Hong Kong economy.

There is often a lot of confusion about the official status of Hong Kong, but the currency is the Hong Kong dollar.

Let’s find out more.

What is the currency of Hong Kong?

The currency of Hong Kong is the Hong Kong dollar.

This is regulated by the Hong Kong Monetary Authority, and there three commercial banks licensed to issue banknotes for general circulation: HSBC, Bank of China, and Standard Chartered.

Denominations issued by these banks are varied from $20 to $1000, though the $10 notes are only issued by the Government of Hong Kong along with all the coins.

As of 2019, the Hong Kong dollar is the ninth most traded currency globally—for an administrative region of around 7 million people, this is an incredibly strong currency.

Hong Kong’s history is a long and complex one involving a great many different administrators and rulers.

There was no local currency in use when the free port was established at Hong Kong in 1841, and many foreign currencies circulated, including rupees, reales, and Chinese cash coins.

The British government introduced sterling silver coinage in 1825, but ultimately this failed to really get established and the Spanish silver coin was preferred.

By the 1860s, it came to the realization that attempts to displace the existing currency were useless.

The Hong Kong dollar was established in its modern form in the period post 1997, when British colonial rule was fully ceded to the local government and special administrative authority.

But of course the currency had been developing long before that, and the Hong Kong dollar had been pegged to the US Dollar in 1967, a few years before the Sterling Area came to an end in 1972.

Without doubt, then, it’s a complex historical picture involving two of the world’s biggest economies pegged to this relatively small area, but in any case since at least the 20^th Century the Hong Kong dollar has been the main currency of Hong Kong.

Did Hong Kong use the pound?

The pound was never used in Hong Kong in the modern sense.

As mentioned, there were multiple attempts by the British Empire to get sterling coins in circulation in Hong Kong and the wider area, but ultimately they were to fail.

Existing currencies, though not yet the Hong Kong dollar, were too well established and could be supplanted.

That said, for a long time the Hong Kong dollar was pegged to the pound sterling in value until 1967.

But the system of decimalization was also an issue for the use of the Hong Kong dollar or the existence of a Hong Kong pound; for there to be a Hong Kong pound, there would have also to be Hong Kong shillings, guineas, and so on.

The US dollar, on the other hand, was always decimal based.

This made the pegging of the Hong Kong dollar to the US dollar the natural move, though again the pound had never been used in Hong Kong even before the value pegging was switched from the pound to the dollar.

Again, these sorts of complex historic-economical questions are rarely easy to summarize, but the fact is that the pound was never really used in Hong Kong.

Why is the Hong Kong dollar so strong?

It’s worth mentioning that, like with any currency, the Hong Kong dollar is strong sometimes and weaker at other times—it’s never completely stable for long.

That said, given that, as mentioned, it is the ninth most traded currency in the world, it is naturally very strong.

Part of the reason for this is that Hong Kong is able to sell US dollars to buy Hong Kong dollars, withdrawing cash from their own banking system.

This reduces aggregate balance and causes interest rates to rise, which strengthens the HKD and allows it stay within the trading band.

What currency should I take to Hong Kong?

You will, of course, need Hong Kong dollars to pay for things in Hong Kong.

So, if you can exchange locally before you leave, then this is going to be your best option. If you can’t get hold of Hong Kong dollars locally, any major world currency will be able to be converted at great rates within Hong Kong itself once you arrive; US dollars are likely the best choice, but also euros or even pound sterling.

You should be able to get access to one of these currencies, though equally most ATMs in Hong Kong will also accept international debit cards and, for a small fee, give you Hong Kong dollars from your own account.

The Hong Kong dollar, then, is one of the strongest currencies in the world given the country’s size.

The economy of Hong Kong is strong for a number of reasons, and so the dollar naturally does very well off the back of this.

If you are travelling to Hong Kong then you should have very little trouble securing good conversion rates on just about any major international currency, either before or after you arrive.