Hong Kong was the first place to call the currency "Yuan". At first, when Hong Kong became a British colony, the British currency was used. However, because the trade with Chinese mainland at that time was dominated by silver, silver coins from all over the world, including Mexican Eagle Ocean, Spanish Fo Yin (Charlie Silver Dollar) and Qing Dynasty Silver Dollar, all passed freely in Hong Kong. 1857 the hong kong government announced that bank notes issued by the French agricultural credit bank can be used to pay government fees. Later, in order to control the local currency more effectively, in July 1862, the government officially announced that Hong Kong used the silver-based monetary system and adopted the silver dollar as the basic monetary unit. The word silver dollar changed from an adjective to a quantifier. 1 In April, 863, Hong Kong issued the official minted currency for the first time, and ordered 1 silver coins and1copper coins from London, England. 1 In May, 866, the Hong Kong Mint was established in Causeway Bay, Hong Kong, and made its own1won, with 5 points, 2 points and 650 points. At that time, every silver coin produced in Hong Kong was printed with the words "Hong Kong dollars". The name of this currency was also sent back from Hong Kong to Chinese mainland, Japan and South Korea, becoming the unit name of the local currency. The purpose of Hong Kong coinage was originally to replace other miscellaneous coins circulating in Hong Kong, but it failed in the case of "bad money driving out good money", and the mint suffered serious losses. Later, at the close of June 1868, Hong Kong changed other silver dollars into legal tender. During the two-year operation of the Hong Kong Mint, * * * produced 2 108054 silver coins. 1872, in view of the shortage of currency in Hong Kong, the government authorized the Hongkong and Shanghai Banking Corporation to issue 1 yuan notes, and the Hong Kong dollar tokens were remolded in London.

Make legal tender

1In February, 895, the Hong Kong Governor's Office announced that the Mexican silver dollar (Eagle Ocean), the British pound silver dollar and the Hong Kong silver dollar were legal tender in Hong Kong, and other currencies were prohibited from circulating. But at that time, people were still used to using other currencies such as Spanish silver dollar (Foyang), China silver dollar or Japanese silver dollar (Yang Long), and the government did not explicitly crack down. At the same time, Hong Kong ordered Hong Kong silver coins from the Indian Mint to replace the 1 yuan notes of the Hongkong and Shanghai Banking Corporation. In March of the same year, Hong Kong formally legislated that banks must obtain the approval of the British government before issuing paper money. Subsequently, Standard Chartered Bank, The Hongkong and Shanghai Banking Corporation Limited and Beneficial Bank were approved to issue banknotes circulating in Hong Kong at 1897, 1898 and 19 165438 respectively. 19 12 The Hong Kong government announced the ban on foreign copper coins, and 19 13 banned foreign paper money, silver coins and nickel coins. This once caused inconvenience and dissatisfaction among Chinese. For example, 19 12, Hongkong Trams refused to accept China copper coins in response to the government announcement, which led to a tram strike by Chinese people and caused losses to the tram company. Later, the incident even subsided after three days of free passenger transport.

Abandon the silver standard

During the period of 1935, the price of silver in the United States and other places rose, which led to the outflow of silver from China and Hongkong. On June 9th, the Hong Kong Government passed the Monetary Ordinance, 1935, 165438, and declared "Hong Kong dollar" as the monetary unit of Hong Kong. The exchange rate between Hong Kong dollar and British pound was set at 16.8 to 1. (Five days before Hong Kong adopted the Hong Kong dollar as the currency in circulation, that is,165438+1October 4th, China announced that it would abandon the silver standard and issue legal tender instead. ) 1 August, 9371day, all kinds of silver dollars ceased to circulate, and Hong Kong dollars officially became legal tender. When Japan occupied Hong Kong in World War II, it forcibly replaced Hong Kong dollars with Japanese military tickets. It was not until after the war that the Hong Kong dollar resumed its legal status.

Implement the linked exchange rate

At first, the Hong Kong dollar was pegged to the British pound, but after the war, Britain's economic strength weakened and once depreciated sharply, affecting Hong Kong's economy. After the pound floated freely 1972 in June, the Hong Kong government changed its peg to the US dollar. The exchange rate started on July 6th, 1972, which was originally HK$ 5.65 1 USD. 1 February, 973, changed to HK$ 5.0851USD. Since June 1974 1 1, it has been changed to free floating. Until 1983, the crisis of confidence in Hong Kong's future led to a sharp drop in the exchange rate of the Hong Kong dollar, and once fell to 9.6 Hong Kong dollars 1 US dollar in September of the same year. In June 65438+1 October 65438+July of the same year, then Financial Secretary Peng Lizhi announced that the exchange rate of the Hong Kong dollar was pegged to the US dollar, and it was set at HK$ 7.801US dollar, which has been maintained ever since. In the future, the exchange rate between Hong Kong dollars and US dollars can float freely to a limited extent, as long as it is not much different from the pegged exchange rate (7.80 Hong Kong dollars to 65,438 US dollars +0). For example, in 2003, the Hong Kong dollar once rose to HK$ 7.7094 to US$ 65,438+0, but soon returned to near normal level.

Since May 18, 2005, the Hong Kong Monetary Authority (HKMA) has tightened its exchange rate control measures, limiting it to HK$ 7.75-7.85 1 USD, and named the level of 7.75 as "strong exchange guarantee" and the level of 7.85 as "weak exchange guarantee" to stabilize the linked exchange rate system. If it touches or is very close to any threshold, HKMA will immediately keep the exchange rate within this range through administrative means. Speaking of "strong convertibility guarantee", HKMA will buy dollars and sell Hong Kong dollars; Speaking of "weak convertibility guarantee", HKMA buys Hong Kong dollars and sells US dollars.

future

With the increasingly close economic and trade relations between Hong Kong and China, the inflation in China is becoming more and more serious, and the economic cycle in the United States is opposite to that in Hong Kong. The linked exchange rate system has brought many problems to Hong Kong's economy. First, the Hong Kong dollar interest rate can only follow the US dollar interest rate and cannot be adjusted according to the local economic situation; At the same time, some Hong Kong goods are imported from China, which leads to imported inflation and negative interest rates.