It is pegged at 1 Hong Kong dollar to 1.03 Macanese patacas, and is generally accepted at par or MOP 1.00 for retail purchases.

Foreign currencies such as Indian rupees, Spanish or Mexican 8 reales, and Chinese cash coins circulated.

In 1863, the Royal Mint in London began issuing special subsidiary coinage for use in Hong Kong within the dollar system, though other national currencies circulated unofficially for years afterwards.

The machinery at the Hong Kong mint was sold first to Jardine Matheson and, in turn, to the Japanese and used to make the first Yen coins in 1870.

New British trade dollars were coined at the mints in Calcutta and Bombay for use in both Hong Kong and the Straits Settlements.

In 1906, the Straits Settlements issued their own silver dollar coin and attached it to a gold sterling exchange standard at a fixed value of 2 shillings and 4 pence.

It was from this point in time that the concept of a Hong Kong dollar as a distinct unit of currency came into existence.

It concluded that it was important for Hong Kong to facilitate free flow of capital with China and the same monetary standard was thus preferred.

After the end of the Second World War, the Hong Kong dollar was re-pegged to sterling at a fixed rate identical to the pre-war level.

[8] Meanwhile, the United Kingdom made efforts in maintaining the sterling area with countries of the British Commonwealth as well as its colonies.

[10] The People's Republic of China (PRC) established by the Chinese Communist Party in 1949 was in dire need for foreign currency, especially after the Korean War (1950–1953) and the Sino-Soviet split in the early 1960s for international trade with countries of non-Soviet bloc.

[9] Of the British sterling obtained by PRC through Hong Kong during 1953 and 1971, about 40–50% was supplied by The Hongkong and Shanghai Banking Corporation (HSBC), the de facto "central bank" in Hong Kong, which accounted for 10% of annual foreign currency needed by PRC in the period.

Due to the lack of public confidence in the talks, on 24 September 1983, the Hong Kong dollar was devalued by 15% over 2 days to a historical low at HK$9.6 to US$1.

[15] Amidst the monetary crisis, John Greenwood, an economist who was later dubbed the "architect of the Linked Exchange Rate System" in Hong Kong,[16] advocated the proposal to peg the Hong Kong dollar to the U.S. dollar with a return to the former currency board system.

[18] John Bremridge was once quoted saying that the rate was somewhat "a number off the air", but the most important thing was the restoration of public confidence in Hong Kong dollar with the peg amidst the crisis.

[20] As envisioned, the currency board monetary regime continues to function with the same pegged rate beyond the handover of sovereignty of Hong Kong to China in 1997.

The currency board system ensures that Hong Kong's entire monetary base is backed with US dollars at the linked exchange rate.

The resources for the backing are kept in Hong Kong's exchange fund, which is among the largest official reserves in the world.

Hong Kong also has huge deposits of US dollars, with official foreign currency reserves of US$361 billion as of March 2016.

'seven units eight'); in financial terms, where integer values in cents exist, e.g., HK$6.75, the phrase is 六個七毫半 (Cantonese Yale: luhk go chāt hòu bun; lit.

These were not issued because the Japanese sank a ship carrying 1-cent coins bound for Hong Kong in the Second World War.

Starting on New Year's Day (1 January) 1993 at stroke of midnight HKT, prior to the establishment of the HKSAR, coins with Queen Elizabeth II's portrait were gradually withdrawn from circulation.

Because the redesign was highly sensitive with regard to political and economic reasons, the designing process of the new coins could not be entrusted to an artist but was undertaken by Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, himself who found in the Bauhinia the requested "politically neutral design" and did a secret "scissors and paste job".

[26] In early 1997, to commemorate Hong Kong's transfer of sovereignty from Britain to the PRC, the government issued a new commemorative coin set which depicted Chinese cultural themes and Hong Kong's landmarks and 19 and 97, marking the year 1997, on each side of the designs.

The arrangements in Hong Kong are unusual but not unique; a comparable system is used in the United Kingdom, where seven banks issue banknotes.

On New Year's Day (1 January) 1993 at stroke of midnight HKT, HSBC, Bank of China and Standard Chartered officially introduced all new banknote designs.

HSBC, Bank of China and Standard Chartered officially introduced a new series of banknotes on New Year's Day (1 January) 1993 at stroke of midnight HKT in denominations of $10, $20, $25, $50, $100, $500 and $1000.

After a less-than-successful trial from 1994 to 2002 to move the HK$10 denomination from the banknote format (issued by the banks) to the coin format (Government-issued), HK$10 notes are currently the only denomination issued by the HKMA, having acquired the note printing plant at Tai Po from the De La Rue Group of the UK on behalf of the Government.

Commemorative banknotes have also been issued celebrating the note-issuing banks' anniversaries as well as the Olympic Games held in Beijing in 2008 and 2022.

In this unique linked exchange rate system, the Hong Kong Monetary Authority (HKMA) authorises the three note-issuing commercial banks to freely issue new banknotes provided that they deposit an equivalent value of United States dollars with the HKMA.