The Hong Kong dollar is pegged to the US dollar at HK$7.78 and one Hong Kong dollar is worth just more than 1 Renminbi. This means that the Hong Kong dollar basically follows the same ups and downs as the US dollar. The peg also contributes to the relatively high cost of doing business in Hong Kong compared to the de-linked Asian currencies in the region.
If the Hong Kong dollar loses its peg to the American dollar – which financiers speculate may need to happen in order to reduce the high costs in Hong Kong – it could devalue by as much as a third. Another scenario sees the Hong Kong dollar merging with the Chinese yuan when that currency becomes fully convertible.
Changing money
Money changers in Hong Kong charge commission, so visitors staying for only a short time should shop around for competitive rates. Shops recommended by the Hong Kong Tourist Association include First International Resources and Shop 12. Banks offer their account holders commission-free exchange.