The history of the Hong Kong Dollar
In 1841, Hong Kong was established as a free-trading port in Asia. Due to the vast amount of international trade that flowed through the city and the lack of a local currency, other currencies were used as a substitute (the Rupee, Spanish and American silver Dollars, Chinese Yuan and Pound Sterling.) It would not be until 1845, when the Oriental Bank of Hong Kong was established that Hong Kong would issue its own bank notes, which existed alongside the metallic coinage system of copper, bronze and silver coins.
In 1842, the British assumed control over the city and the colonial government strove to make the Pound Sterling Hong Kong's official currency. The British colonial rulers only succeeded in achieving this in 1863 by issuing the first legal coins specifically for Hong Kong. The Royal Mint in London issued the silver dollar as the first regal coin, which portrayed the royal cypher on its face.
In 1935, when China officially abandoned the silver standard, Hong Kong followed. On November 9, 1935, the Hong Kong dollar was declared the official currency; with an exchange rate that was fixed to the British pound.
During the Japanese occupation of 1941 to 1945, the Japanese Military Yen (JMY) became the only legal currency accepted for daily exchange. After WWII, the JMY became obsolete, and Hong Kong regained full control of their banks.
In 1984, Britain and China signed the Sino-British Joint Declaration, which stipulated that the British dependency of Hong Kong return to Chinese rule in 1997 as a Special Administrative Region (SAR) of China. The Joint Declaration and a Chinese law called 'The Basic Law', which followed in 1990, provided for the SAR to operate with a high degree of economic autonomy for 50 years beyond 1997 - including the right to continue to issue its own currency.
Currency in Hong Kong is issued by the Government and three local banks under the supervision of the territory's de facto central bank: the Hong Kong Monetary Authority (HKMA). The HKMA performs the functions of a central bank and authorises three commercial banks: the Bank of China, HSBC (formerly the Hong Kong and Shanghai Banking Corporation), and the Standard Chartered Bank-to issue Hong Kong dollars.
Bank notes are printed by Hong Kong Note Printing Limited.
Participating Members: The Hong Kong dollar is the official currency of Hong Kong. The HK dollar is also accepted in southern parts of mainland China and the Macau Special Administrative Region of the People's Republic of China.
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