anyone know why the hk exchange rate (to usd) is 7.8129 now?

The Linked Exchange Rate System was established in 1983. It is in essence a Currency Board system, which requires both the stock and the flow of the Monetary Base to be fully backed by foreign reserves. Any change in the size of the Monetary Base has to be fully matched by a corresponding change in the foreign reserves. In Hong Kong, the Monetary Base comprises the following components:

Certificates of Indebtedness (as backing for banknotes) and government-issued notes and coins;

the sum of balances of banks' clearing accounts (Aggregate Balance) maintained with the HKMA for the purpose of clearing and settling transactions between the banks themselves, and also between the banks and the HKMA; and

the outstanding amount of Exchange Fund Bills and Notes.


i) Certificate of Indebtedness and coins issued

Banknotes in Hong Kong are issued by the three note-issuing banks (NIBs). When the three NIBs issue banknotes, they are required to submit US dollars (at HK$7.80=US$1) to the HKMA for the account of the Exchange Fund in return for Certificates of Indebtedness (which are required by law as backing for the banknotes issued). The Hong Kong dollar banknotes are therefore fully backed by US dollars held by the Exchange Fund. In the case of government-issued notes and coins, which are issued by the Government through the HKMA, transactions between the HKMA and the agent bank responsible for storing and distributing the coins to the public are settled against US dollars at the rate of HK$7.80 to one US dollar.

ii) The Aggregate Balance

Operating under the rule-based Currency Board system, the Aggregate Balance will vary in accordance with the flow of fund into and out of the Hong Kong dollar. The HKMA operates Convertibility Undertakings on both the strong side and the weak side of the Linked Rate of 7.80. Under the strong-side Convertibility Undertaking, the HKMA undertakes to buy US dollars from licensed banks at 7.75. Under the weak-side Convertibility Undertaking, the HKMA undertakes to sell US dollars at 7.85. Within the Convertibility Zone between 7.75 and 7.85, the HKMA may choose to conduct market operations consistent with Currency Board principles with the aim of promoting the smooth functioning of the money and foreign exchange markets.

iii) Outstanding Exchange Fund Bills and Notes

The proceeds from the issue of Exchange Fund Bills and Notes have over time been switched into US dollar assets. The HKMA has also undertaken that additional Exchange Fund paper will only be issued when there is an inflow of capital. This ensures that all new Exchange Fund paper will be fully backed by foreign currency reserves. Starting from 1 April 1999, interest payments on Exchange Fund paper are allowed to expand the Monetary Base. Additional Exchange Fund paper is issued to absorb such interest payments. This procedure is consistent with the Currency Board discipline, since interest payments on Exchange Fund paper are backed by interest income on the US dollar assets backing the Monetary Base. It also allows the Exchange Fund Bills and Notes programme to grow in a non-discretionary manner.

Click HERE to see chart on resilience of the Hong Kong dollar against external shocks.

For a general discussion on the linked exchange rate system, please see also Background Brief No. 1: Hong Kong's Linked Exchange Rate System.

香港金融管理局在2005 年5月18日宣布三項優化聯繫匯率制度運作的措施。這些措施是財政司司長經諮詢外匯基金諮詢委員會後同意的，目的是要消除在聯繫匯率制度下港元匯率可轉強程度的不明朗情況，以及理順貨幣和外匯市場在貨幣發行局安排下的互動關係。

這3項措施為：

推出強方兌換保證，金管局會在7.75的水平向持牌銀行買入美元，有關措施即時生效；

將現行金管局在7.80水平出售美元予持牌銀行的弱方兌換保證移至7.85的水平，讓強弱雙向的兌換保證能對稱地以聯繫匯率7.80為中心點而運作。金管局會採取為期五週，每週移動100點子的循序漸進方式來推行這項措施：弱方兌換保證在2005年5月23日將會是7.81，其後每逢星期一移動100點子，直至2005年6月20日達到7.85為止；

在強方及弱方兌換保證水平所設定的範圍（兌換範圍）內，金管局可選擇進行符合貨幣發行局制度運作原則的市場操作。這些市場操作的目的是為確保聯繫匯率制度暢順運作，例如是消除可能會不時出現的市場異常現象。

金管局會繼續就聯繫匯率制度的運作保持高透明度。與現行做法一樣，由持牌銀行在強方及弱方兌換保證水平所進行的交易，以及金管局如在兌換範圍內所作出的市場操作對總結餘造成的影響會即時予以公布。有關資料亦會載於每月提交予外匯基金諮詢委員會轄下的貨幣發行委員會的貨幣發行局制度運作報告，該報告亦載於金管局網站及《香港金融管理局季報》。

金管局總裁任志剛表示三項優化聯繫匯率制度的措施已顧及市場情況的轉變，以及汲取近期就貨幣發行局制度運作所取得的經驗。他說：「推出強方兌換保證應能消除在聯繫匯率制度下港元匯率可轉強程度的不明朗情況，亦能減少港元被用作投機人民幣升值的工具。」

在優化聯繫匯率制度運作的措施生效後，港元對美元的兌換價已由7.8 轉為7.75 - 7.85的保證水平內。實際匯率的水平會視乎港元的需求，利率水平等。有一段時間港元依然強勢，原因是炒作人民幣升值，但自人民幣改革匯率機制生效後穩步上揚。人民幣自升破港元一算後，港元一直處於弱勢，之前強勢是因為港元是炒作人民幣升值的替代品，現在已沒有這個價值。同時銀行體系資金氾濫又造成同業利率偏低，在市場供求情況下港元自然處於弱勢了。

HKMA has changed the peg range from 7.75 to 7.85 two years ago.