Hong Kong Dollar (HKD)

Hong Kong — Hong Kong Monetary Authority

Hong Kong dollar — pegged to the US dollar within a tight 7.75–7.85 trading band.

FX Session:
Tokyo
HKD/USD
0.12763
HKD/USD Exchange Rate
Economic Indicators
Indicator Latest Previous Change Date
Policy Rate 4.75 4.75 0.00 2025-06-02
Inflation 1.49 1.73 -0.24 2025-12-31
Unemployment 3.5 3.5 0.00 2025-05-31
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About the Hong Kong Dollar (HKD)

The Hong Kong dollar (HKD) is the official currency of Hong Kong. Since 1983 it has operated under a Linked Exchange Rate System against the US dollar, and since 2005 it has traded within a 7.75–7.85 convertibility band managed by the Hong Kong Monetary Authority.

Hong Kong Monetary Authority: monetary policy framework

The Hong Kong Monetary Authority (HKMA) does not run an independent interest-rate policy. Instead it defends the USD/HKD peg with currency-board mechanics — buying HKD at 7.75 and selling at 7.85 — which means HKD interest rates closely track those of the Federal Reserve.

What moves the HKD?

  • USD/HKD position within the 7.75–7.85 convertibility band.
  • Federal Reserve policy and US dollar funding conditions.
  • HIBOR-LIBOR / HIBOR-SOFR spreads and aggregate balance.
  • Capital flows, IPO issuance, and dividend-payout cycles.
  • Hang Seng Index moves and southbound Stock Connect flows.
  • Geopolitical risk and the China growth outlook.

Key data and events to watch

  • USD/HKD spot and HKMA convertibility undertakings.
  • 1-month and 3-month HIBOR.
  • HKMA aggregate balance.
  • Federal Reserve policy decisions.
  • Hong Kong CPI and trade balance.

Frequently asked questions about the Hong Kong Dollar

Is the Hong Kong dollar pegged to the US dollar?
Yes. Since 2005 the HKD has traded within a 7.75–7.85 convertibility band against the US dollar, defended by the Hong Kong Monetary Authority through currency-board operations.
Does the HKMA set independent interest rates?
No. Under the Linked Exchange Rate System, HKD interest rates are effectively imported from the United States. Local rates can deviate temporarily through HIBOR but ultimately track US monetary policy.
What happens if USD/HKD touches the band edges?
The HKMA intervenes — buying HKD when the rate hits 7.75 (strong-side convertibility undertaking) and selling HKD at 7.85 (weak-side). These operations adjust the aggregate balance and ultimately push HIBOR back toward US-dollar funding rates.
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