Urgent Help Please?? ?

Question

I can't seem to be able to find a website which gives me information on the reason behind the whole HK$ being pegged to the US$ dollar and all that type of stuff. :(

Answer 1

The Hong Kong dollar has been previously linked to the Pound Sterling. In 1971, the Hong Kong dollar was then pegged to the US dollar with a fluctuation limit, after the Sterling area was liquidated. This regime was later changed into a controlled, floating basis, then returning once again to being pegged to the US dollar again in 1983. The purpose for adopting this peg was to prevent the Hong Kong dollar from collapsing amidst a political row between China and the United Kingdom over the future of the city. Ever since 1983, H.K. has adopted a Currency Board Arrangement to fix the exchange rate at HK$7.8 per US dollar.