During the development of Hong Kong as a trade and financial center, different types of linked exchange rate systems have been implemented. 1863, the Hong Kong government announced that the then international currency, the silver dollar, was the legal tender of Hong Kong, and began to issue its own silver dollar in 1866. Until 1935, Hong Kong's monetary system was based on the silver standard. After the global silver crisis, the government announced that it would abandon the silver standard, and the Hong Kong dollar was linked to the British pound at the exchange rate of 16 Hong Kong dollars 1 British pound.

According to the Currency Regulations promulgated by 1935, banks are required to hand over all their silver to the Exchange Fund to support the issuance of paper money in exchange for debt certificates, and the Exchange Fund will invest the silver received in sterling assets. These debt certificates become the legal basis for issuing banks to issue paper money.

In fact, this arrangement is the currency board system. If the note-issuing bank issues additional notes in the future, it must purchase debt certificates in pounds sterling.

1972 In June, the British government decided to let the pound float freely. After that, the Hong Kong dollar was once pegged to the US dollar, initially at HK$ 5.65 to US$ 65,438+0, and changed from HK$ 5.085 to US$ 65,438+0 in February 1973. However, since June 1972, note-issuing banks can purchase certificates of indebtedness in Hong Kong dollars.

1974165438+1October, due to the weakness of the US dollar, the Hong Kong dollar changed to float freely.

Although the floating exchange rate system operated smoothly in the first two years after its implementation, the subsequent situation was not satisfactory. At that time, the monetary policy framework was still in the initial stage of development, which was not enough to replace the monetary framework based on foreign currency value. At the same time, there are no clear monetary policy goals, let alone the tools to achieve them. As a result, Hong Kong's economy entered a turbulent period, and almost all links fluctuated greatly.

The real GDP growth rate dropped to 0.3% in 1975, but rose to 16.2% in 1976.

The inflation rate rose sharply from 2.7% in 1975 to 1980+05.5%. The exchange rate of Hong Kong dollars ranges from 5. 13 to HK$ 1 USD 1 98/HK$ 9.60 to HK$1USD 1983.

Speculation and sniper activities, as well as the growing crisis of confidence in Hong Kong's future, further aggravated the depreciation of the Hong Kong dollar and reached a very serious juncture at 1983. In September, the exchange rate of HK$ 1983 hit a new low, depreciating by 13% in two days, and falling to a low of HK$ 9.60 1 USD.

Faced with the currency crisis and doubts about the soundness of many banks, the Hong Kong government announced a new policy of stabilizing the exchange rate of the Hong Kong dollar on June 1983, June 10 and June 15, linking the Hong Kong dollar to the US dollar, with a fixed exchange rate of HK$ 7.80 1 US dollar. This arrangement has become the basis of Hong Kong's monetary system.