Black Saturday, 24 September 1983, is the name given to the crisis when the Hong Kong dollar exchange rate versus the United States dollar was at an all-time low. On that day, US$1 exchanged for HK$9.6. [1] For a period, Hong Kong stores began quoting products in US dollar prices, because of the uncertain fluctuation in domestic currency.
From November 1974 to October 1983, Hong Kong was under a floating rate regime. The political talks of Hong Kong's handover of sovereignty to China involving UK's Prime Minister Margaret Thatcher's visit to Beijing began to send consumer confidence down in 1982. The stalling of the Sino-British Joint Declaration also contributed to a pessimistic attitude. The collection of events eventually resulted in "Black Saturday”, which came in the form of a currency, banking and fiscal crisis. [2]
The government responded with a linked exchange rate on 17 October 1983.
The renminbi is the official currency of the People's Republic of China. It is the world's 5th most traded currency as of April 2022.
In finance, an exchange rate is the rate at which one currency will be exchanged for another currency. Currencies are most commonly national currencies, but may be sub-national as in the case of Hong Kong or supra-national as in the case of the euro.
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The Hong Kong dollar is the official currency of the Hong Kong Special Administrative Region. It is subdivided into 100 cents or 1000 mils. The Hong Kong Monetary Authority is the monetary authority of Hong Kong and the Hong Kong dollar.
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In public finance, a currency board is a monetary authority which is required to maintain a fixed exchange rate with a foreign currency. This policy objective requires the conventional objectives of a central bank to be subordinated to the exchange rate target. In colonial administration, currency boards were popular because of the advantages of printing appropriate denominations for local conditions, and it also benefited the colony with the seigniorage revenue. However, after World War II many independent countries preferred to have central banks and independent currencies.
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Joseph Yam Chi-kwong, GBM, GBS, CBE, JP is a Hong Kong statistician, economist and civil servant. He was the first Chief Executive of the Hong Kong Monetary Authority, Hong Kong's de facto central bank, holding the position for 16 years. In 2011 Yam was elected to a member of the board of directors of the Swiss Bank UBS AG. In 2014, following UBS AG's restructuring, he was appointed to the board of directors of the UBS Group AG and served in the position till May 2017. He has been a member of the Corporate Culture and Responsibility Committee and the Risk Committee of the UBS Group AG since 2011 and a non-official member of the Executive Council of Hong Kong since 2017.
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The United States dollar was established as the world's foremost reserve currency by the Bretton Woods Agreement of 1944. It claimed this status from sterling after the devastation of two world wars and the massive spending of the United Kingdom's gold reserves. Despite all links to gold being severed in 1971, the dollar continues to be the world's foremost reserve currency. Furthermore, the Bretton Woods Agreement also set up the global post-war monetary system by setting up rules, institutions and procedures for conducting international trade and accessing the global capital markets using the US dollar.
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