Home   |    About Us   |   Feedback   |   Services Offered   |   Do's & Don'ts   |   Prices   |   Register   |   Contact Us   |   Sitemap  | Faq
 
 

  Relation between Percentage Shares above Support and Delivery  
  Name change of company  
  Daily Trend Of Index  
  Intraday Trend of Index  
  Intraday Nifty System  
  Results of Intraday Trend  
  Results of Daily Trend  
Trend of other markets of the world  
Technical Analysis of 20 Active Stocks  
Analysis of Indian Stock Market Future Stocks  
 Free Newsletter  

Technical Terms

 
Intraday Trading chat  Room Samples  
  Newsletters  
  Trend of stocks & their 200 DMA  
  Weekly Moving Average (NSE)  
  Weekly Moving Average (BSE)  
Commodities  
 
Currencies
HONG KONG DOLLAR
Introduction | Overview | Structure | History | Factors affecting change in exchange rates | Daily trend of Hong Kong dollar | Weekly trend of Hong Kong Dollar
Introduction


Dollar is the base unit of the currencies in almost 25 economies and hence, is the most widely used currency unit in the world. Apart from countries, these 25 economies also include other territories and associations including Bermuda, the Cayman Islands, Cook Islands, Hong Kong etc whose currencies are denominated in dollars. One of the most important currencies among them is the Hong Kong dollar.

Hong Kong dollar is the official currency of Hong Kong i.e. the special Administrative Region of People’s Republic of China. The currency is denoted with a "$" sign and for the purpose of differentiating itself from other dollar currencies, it is also denoted as "HK$". Hong Kong dollar was officialized to be the national currency of the territory in 1937 when one-dollar currency note ordinance was passed. "Cent" provides with the subunit of the currency. According to ISO 4217 standards, the currency code for Hong Kong dollar is HKD and the numeric code is 344.

Overview


Hong Kong is a special administrative region of china but they do not use the same form of currencies. In fact, the territory is provided with full independence in context of issuance of currency under the Basic Law of Hong Kong and Sino-British Joint Declaration. The Hong Kong dollar is based on a linked exchange rate regime in which the exchange rate of one currency is linked with that of another. In this case, the currency is linked to the United States dollar since 1983, though it was linked to the British pounds prior to it. The currency is also pegged Macanese patacas.

Hong Kong dollar is being controlled by a currency board system under which a mechanism has been fixed for a bank to be able to issue the currency. It suggests that if the bank has to issue Hong Kong dollars, it must have an equal amount of exchange in US dollars. This keeps the currency well supported by the US dollars, resources being kept in Hong Kong’s exchange fund, one of the largest reserves in the world. Many a measures have also been taken to stabilize the currency interest rates by setting the upper and lower limit for the interest rates. Hong Kong is largely dependent on its foreign trade and gain edge having a stable national currency. The import and export of all the currencies is free in Hong Kong.

Structure

Like all the dollar currencies throughout the world, Hong Kong dollar too, have its subunit as "cent". The currency is managed by a de facto central bank i.e. Hong Kong Monetary Authority that supervises the three authorized banks over issuance and circulation of currency. The banks include The Hong Kong and Shanghai Banking Corporation (HSBO), Standard Chartered Bank and the Bank of China (BOC) that have the authority to issue the bank notes though the printing function is held by the Hong Kong Note Printing Limited. That is why 3 different series of banknotes, 1 from each bank, circulate simultaneously.  The banknotes are printed in 6 denominations namely $10, $20, $50, $100, $500, $1000, the $10 note being the most common note in daily usage though BOC doesn’t issue it. Recently, a new $10 note was issued by the government directly and not through the banks to satisfy the constant public demand.

The notes of all three different series of bank notes depict some images on the their front and reverse sides. The list below is equipped with the details of designs

  1. Series issued by Hong Kong and Shanghai Banking Corporation

  • $10 - junk and container ship

  • $20 - Victoria peak and Bauhinia blakeana

  • $50 - Po Lin temple and lion

  • $100 - Lantau link: Tsing ma bridge and lion

  • $500 - Hong Kong International airport and lion

  • $1000 - Victoria harbor and black kite

  1. Series issued by Bank of China

  • $20 - the peak tower

  • $50 - Tsim sha Tsui waterfront and Hong Kong Cultural Center and Space Museum

  • $100 - Lantau link: Tsing ma bridge and lion

  • $500 - Hong Kong International airport

  • $1000 - Wan Chai Waterfront: HKCEC and Central Plaza

  1. Series issued by Standard Chartered bank

  • $10 - Chinese dragon headed Carp
  • $20 - Chinese dragon headed Carp and image of Hong Kong (1850)
  • $50 - Chinese dragon headed Turtle and image of Hong Kong (1890)
  • $100 - Oilin and image of Hong Kong (1930)
  • $500 - Fenghuang and image of Hong Kong (1970)
  • $1000 - Chinese dragon and image of Hong Kong (2000)

The coinage in the currency is issued by the government of the territory in 7 denominations that are 10, 20 50 cents, $1, $2, $5 and $10. Prior to 1992, all the coins possessed the portrait of the queen Elizabeth II on the obverse side of them but from 1993 onwards, an engraved image of bauhinia flower replaced the portrait the new coins were circulated gradually. The reverse side of the coins depicts the value of the coin and the year of minting. The queen effigy coins are still accepted as a legal tender in Hong Kong. The recent improvements in the value payments have lead to the invention of "Octopus cards" in Hong Kong and as a result the usage of coins has declined. Commemorative currency is also issued in Hong Kong to show gratitude towards various events and people.

History


Hong Kong belonged to Imperial China before 1839 but the British took over the land under the Treaty of Nanking after defeating China in the first opium war. Hong Kong was made a free entrepôt for British Empire in 1841. Consequently, it became a major hub of international trade and British pound was made the official currency for Hong Kong. Other foreign currencies, also, were used as medium of exchange such as Indian rupees, Spanish reales, Mexican reales, Chinese wen and British pounds. In 1845, the first bank in Hong Kong, the Oriental bank was established and with it’s coming into operation, paper currency notes were started to be issued for daily transactions. The need for a separate currency for the Hong Kong was felt and finally in 1863, separate coins were minted by the royal mint, that were called the regal coins.

These coins lacked quality and were below standard in context of government payments. That is why; with in the span of two years, the mint that was set up in Hong Kong was forced to shut down due to losses. Regal coins were stopped from being issued and silver trade coins of USA, Japan and Britain replaced the currency. All this time, the currency in Hong Kong was based on silver but this silver standard was abdicated in 1935 following the steps of China. Also, an ordinance was passed in 1937 known by the name of one-dollar currency note ordinance in which, one-dollar notes were printed and Hong Kong dollar was affirmed as the official currency. The responsibility to issue bank notes was assigned to three local banks namely Mercantile Bank of India Limited, The Charted Bank of India, Australia and China and The Hong Kong and Shanghai Banking Corporation.

In 1941, Japan invaded Hong Kong and took control of it from United Kingdom. This event is popular by the name of Japanese occupation of Hong Kong and during that time, Japanese military yen was made the official unit of currency. When United Kingdom regained its control over Hong Kong in 1945, the Hong Kong dollar resumed its status as the official currency. New issues of the bank notes and coins were circulated with time and even after the handover of sovereignty to China.

Factors affecting the exchange rates between two countries


The volatility in the foreign exchange rates depends upon a numerous macro economic factors that have different degrees of importance to different economies of the world. Some special and exceptional factors affecting the rates may also exist in the case of different countries. Following are shown the common factors on which the foreign exchange rate depends

  • Flow of imports and exports between the countries
  • Flow of capital between the countries
  • Relative inflation rates
  • Fluctuation limits on exchange rate imposed by the governments of the countries
  • Merchandise trade balance
  • Rate of inflation in the country
  • Flow of funds between the countries for the payment of stock and bond purchases
  • Relative growth
  • Short term and long term interest rate differentials
  • Cost of borrowings
 
   Disclaimer | Privacy Statement

Copyright crnindia.com, All rights reserved world wide