Hong Kong is one of the most stable economies in the world. Inflation was 2.4% in 2010, which was lower than expected and as Hong Kong keeps developing, the currency is also maintaining a pretty strong level.. Despite worries about the growing gap between rich and poor in Hong Kong and the associated problems with this, the GDP per capita is higher than Switzerland and The Netherlands and only slightly behind the United States of America.
The above helps the country to have a good financial groundwork and the Hong Kong Dollar is kept at a nearly stable level on the linked exchange system. It is weighted to the United States Dollar and for years it has now been around the 7,77 HK Dollar to one US Dollar. This rate is set by the Hong Kong Monetary Authority and can never exceed the levels of 7,75 and 7,85. At the time of writing the currency is valued at 7.7945 against the US$. It is hardly ever found at the lower level, but during most of 2009 and at the end of 2010 the currency was valued at 7,75 flat.
Despite the sound economics and the steady monetary system, there have been voices that have stated that Hong Kong should adapt the Chinese currency, called Renminbi. This is one hand because that currency is also a very strong currency and easily available if needed, but also because the largest trading partner for Hong Kong is currently China, which would make trading in this currency understandable. Some people already believe that the Yuan (the base unit of China's monetary system) will eventually overtake the US $ as the worldwide accepted currency of trade. The Renminbi is, at the time of writing, however, not freely convertible, which is one of the possible objections to changing the currency.
Despite the above named advantages, there has been no sign of Hong Kong converting to the Chinese system, with new banknotes scheduled for release in 2011. There have been new banknotes planned to be circulated at the end of 2010, but this has since been switched to the first quarter of 2011 with some notes not being released until the end of summer.
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Posted: 02/01/2011Modified:09/15/2011
Reader Comments
Ghulam (Mon Mar 21st)
I was searching for present condition of different currencies that are prevailing now-a-days and I found this article written about Hong Kong Dollar. The article is informative and easy-to-read. It helped me a lot.
