Legend of Xiangjiang Tycoon

The main reason for the separation of the Hong Kong dollar from the "pound anchor" was the impact of the violent turmoil in the international monetary system in the early 1970s.

After World War II, the international monetary system formed the Bretton Woods system based on gold and centered on the U.S. dollar. The U.S. dollar was directly pegged to gold ($5), the United States assumed the obligation to redeem, and other currencies were pegged to the U.S. dollar to form a fixed exchange rate relationship.

The Hong Kong dollar is directly linked to the British pound, and indirectly linked to the US dollar through the fixed relationship between the British pound and the US dollar.

In January, the British Hong Kong government reported to the IMF that the fixed exchange rate between the Hong Kong dollar and the US dollar was 3.97022:1 (the fixed exchange rate of the British pound to the US dollar at that time was 1:4.03, and the fixed exchange rate of the Hong Kong dollar to the British pound was 16:1, which was used to calculate the fixed exchange rate of the Hong Kong dollar to the US dollar).

In 1949, the British pound depreciated twice against the U.S. dollar (30.5% for the first time and 14.3% for the second time), and the Hong Kong dollar maintained a fixed exchange rate of 16:1 with the British pound, and immediately followed the two devaluations against the U.S. dollar.

Three days after the second devaluation, because the Hong Kong dollar could not bear the pressure of devaluation and prices in Hong Kong rose, the British Hong Kong government was forced to announce that the fixed exchange rate between the Hong Kong dollar and the British pound would be adjusted as: 1. Adjustment for appreciation was carried out. fixed price.

After this adjustment, the Hong Kong dollar is still anchored to the British pound, and the issuance of Hong Kong banknotes is still prepared for the issuance of equivalent British pounds. However, this adjustment has sent an obvious danger warning signal to the anchoring relationship between the Hong Kong dollar and the British pound.

The subsequent collapse of the Bretton Woods system completely broke this anchoring relationship.

In August 1971, the beautiful country government announced to close the gold exchange window; then in December, the "G10" led by the United States reached the "Smithsonian Agreement" in Washington, D.C., which depreciated the dollar against gold from $35 per ounce. Adjusted to 38 US dollars / ounce, other major currencies (GBP, Deutsche Mark, French franc, Japanese yen) appreciate against the US dollar, and still maintain a fixed exchange rate system centered on the US dollar.

However, at this time, the Bretton Woods system had fundamentally disintegrated, the value of the US dollar as the international central currency was unstable, and the collapse of the fixed exchange rate system had become an inevitable trend.

Six months after the Smithsonian Agreement was signed, on June 23, 1972, the British government announced that the pound was delinked from the US dollar, and the exchange rate was free to float, and it got rid of the shackles of the fixed exchange rate system.

The actions of the United Kingdom directly affect Hong Kong, because the Hong Kong dollar has always been anchored by the British pound, the exchange rate of the two is fixed, and the issuance of Hong Kong banknotes is prepared with British pounds.

After more than ten days of observation and consideration, the British Hong Kong government announced on July 6, 1972 that the Hong Kong dollar would be delinked from the British pound and instead be directly linked to the US dollar at .65 Hong Kong dollars. The move marked the end of the pound exchange standard.

From the establishment of the monthly currency system reform to the end of July 1972, the pound exchange standard with the pound as the anchor lasted about 33 years.

After the Hong Kong dollar was delinked from the British pound and pegged to the US dollar, the currency issuance and management system in Hong Kong has undergone great changes.

Under the original pound exchange standard system, the fixed exchange rate system and the currency issuance mechanism were combined into one, that is, the peg between the Hong Kong dollar and the British pound was not only a fixed peg of the exchange rate, but also a peg of currency issuance.

However, this time the Hong Kong dollar is pegged to the U.S. dollar, only on the exchange rate, not on the currency issuance.

The British Hong Kong government stipulates that when issuing Hong Kong banknotes, note-issuing banks are not required to pay the equivalent amount of US dollars as issuance reserves. Indebted Party - Certificate of Indebtedness", you can obtain a certificate of indebtedness, and then you can issue Hong Kong banknotes.

It is equivalent to saying that the note-issuing bank can issue Hong Kong banknotes with the credit authorization of the Exchange Fund without paying the issuance reserve. This is significantly different from the original distribution mechanism.

Under the newly established issuance mechanism, the Hong Kong dollar does not have a clear and fixed currency issuance standard. However, various assets in the Exchange Fund are still the final redemption reserve for the Hong Kong dollar, which provides cash protection for the issued Hong Kong banknotes.

In the exchange rate peg, the fixed exchange rate between the Hong Kong dollar and the US dollar requires the intervention of the Exchange Fund to maintain.

After the decoupling of the U.S. dollar from gold in August 1971, the U.S. dollar faced continued depreciation pressure.

In July 1972, although the exchange rate between the Hong Kong dollar and the US dollar was fixed at 5.65:1, it has been under pressure from the depreciation of the US dollar. In order to maintain this fixed exchange rate, the Hong Kong Exchange Fund must enter the foreign exchange market to intervene, selling Hong Kong dollars and buying dollars.

In February 1973, due to speculative selling of the dollar, the U.S. government once again announced the devaluation of the dollar against gold, adjusting the $38/oz to USD/oz.

Subsequently, the British Hong Kong government adjusted the fixed exchange rate of the Hong Kong dollar against the US dollar from the original 5.65:1 to 5.085:1.

Due to the adjustment of the appreciation of the Hong Kong dollar against the US dollar, a large amount of international dollar hot money poured into Hong Kong, which intensified the pressure on the appreciation of the Hong Kong dollar.

Faced with the huge amount of international dollar hot money, the Exchange Fund must intervene in a large number of Hong Kong dollars in the foreign exchange market to calm the pressure on the appreciation of the Hong Kong dollar and maintain the fixed exchange rate of 5.085:1.

However, at that time, the Hong Kong dollar of the Exchange Fund was created by credit, and a large number of Hong Kong dollars were sold in the foreign exchange market, which meant that the money supply of Hong Kong dollars increased greatly, which would cause damage to the stability of Hong Kong's economy.

After more than a year of exchange rate tests and policy deliberation, the British Hong Kong government finally decided to get rid of the shackles of fixed exchange rates on March 26, announcing that the Hong Kong dollar and the U.S. dollar would be decoupled and a free floating exchange rate would be implemented.

After the decision was announced, the exchange rate of the Hong Kong dollar against the US dollar rose rapidly.

The brief peg between the Hong Kong dollar and the U.S. dollar lasted only two years and four months. Since then, the Hong Kong dollar exchange rate has entered a free-floating period, which is also an "anchor-free period", and the Hong Kong dollar is not pegged to any foreign currency.

During the period of no anchor, the issuance mechanism of Hong Kong dollars is still authorized to issue by credit. Note-issuing banks only need to transfer an equivalent amount of Hong Kong dollar margin into the account of the Exchange Fund to obtain a certificate of indebtedness and then issue notes.

In the first three years of the operation of the free floating exchange rate system, the currency of Hong Kong was relatively stable. During this period, Hong Kong continued to have a trade surplus, and the Hong Kong dollar appreciated slowly and moderately. The rise in the index was more modest.

However, after 1978, the Hong Kong dollar currency issuance mechanism began to expose problems. Due to the lack of restrictions on the issuance of Hong Kong dollars and the relaxation of financial credit by the Hong Kong British government, the money supply in Hong Kong increased significantly, causing the Hong Kong dollar exchange rate to depreciate sharply.

From April 1978, the exchange rate of the Hong Kong dollar began to depreciate.

There are three main reasons for the depreciation of the Hong Kong dollar: first, Hong Kong began to have a trade deficit in 1978, which has continued to the present; second, the currency supply of the Hong Kong dollar was out of control, expanding at a double-digit rate, and causing severe inflation. During 1979-1982, Hong Kong The average inflation rate reached 12.6%. During this period, although the British Hong Kong government tried to raise interest rates to control credit, and used the Exchange Fund to curb the depreciation of the Hong Kong dollar, they all had little success. Third, the interest rate level of the Hong Kong dollar is lower than that of the overseas US dollar, causing Hong Kong residents to convert their Hong Kong dollar deposits into US dollar deposits, exacerbating the depreciation of the Hong Kong dollar.

In September 1982, Ms. Margaret of the United Kingdom visited China and negotiated with Huaxia on the Hong Kong issue. This incident became the trigger for accelerating the depreciation of the Hong Kong dollar against the US dollar.

As the negotiation process between Huaying was not smooth, and it was deadlocked within a year, various rumors and speculations were rampant, and people were selling Hong Kong dollar assets in the financial market. Some big banks and foreign companies also began to withdraw some assets from Hong Kong one after another. This made the devaluation of the Hong Kong dollar out of control and detonated the most serious crisis of confidence in the Hong Kong dollar since the beginning of the local currency history of Hong Kong in 1863.

On September 20, 1983, it was a very sunny day for Hong Kong. On this day, the news that the Hong Kong dollar was going to be banned was sold out in the Hong Kong market.

Originally, such news only spread in some villages in the New Territories, but who knew that the news intensified and eventually detonated the whole of Hong Kong.

As soon as the news that the Hong Kong dollar would be banned, the first thing that caused Hong Kong residents to convert their Hong Kong dollar deposits into foreign currency deposits was one after another.

Gu Li

This is also a very normal thing. After all, people are blind, listening to the wind is rain, and if everyone does not want their life savings to become a pile of waste paper, they can only give up Hong Kong dollar deposits and convert them into foreign currency deposits.

And the first to bear the brunt of it is the US dollar, although after the collapse of the Bretton Woods system, the US dollar status in fact no longer exists.

But after all, in terms of the current global scope, the US dollar is still a global currency. For Hong Kong residents at this time, the US dollar is still very strong.

Therefore, many Hong Kong residents rushed to their own deposit banks and asked to convert their deposits into US dollar deposits, even if the exchange rate was higher.

At the beginning, of course, the banks were very happy, after all, they could get a lot of benefits in the process.

As far as Sun Hung Kai Bank is concerned, the condition they offer is that the exchange rate of the Hong Kong dollar to the U.S. dollar is 6:1. You must know that in early September, the exchange rate of the Hong Kong dollar to the U.S. dollar was 4.5:1.

That is to say, according to the previous exchange rate, Sun Hung Kai Bank can earn 1.5 Hong Kong dollars for every dollar exchanged. No one wants to do such a thing.

More black-hearted banks, such as Hengrong Bank, a rival bank of Yulong Bank, offer an exchange rate ratio of 6.5:1.

Of course, these residents will not be willing to listen to these banks, but there is no way. Now the bank has the final say. Either you don't exchange money, or you just listen to me.

Of course, Yulong Bank also encountered such a situation, but Zhao Hezhuo followed Li Zhiwen's words and converted more than 80% of the bank's deposits into US dollars early.

At that time, the average exchange rate ratio of the Hong Kong dollar to the US dollar was 4.7:1.

Therefore, Yulong Bank is not worried about this exchange crisis, especially Zhao Hezhuo.

Zhao Hezhuo even hoped that the situation would be worse, after all, the worse the situation, the better for Yulong Bank.

At the same time, Zhao Hezhuo sighed in his heart that the boss's eyes were really poisonous.

In fact, those financiers in Hong Kong could not see that the Hong Kong dollar was depreciating, but no one thought that the depreciation rate would be so rapid.

Therefore, those financiers or business leaders only exchanged part of their liquidity and deposits into US dollars, instead of converting all or most of the company's funds into US dollars in the industries under Li Zhiwen.

Of course, although the exchange rate ratio between Sun Hung Kai Bank and Hengrong Bank has reached more than 6:1 at this time.

However, Zhao Hezhuo did not keep up with their pace, and also adjusted the exchange rate of Yulong Bank to 6:1.

But every time it is the lowest among the major banks in Hong Kong, and every time it is 0.3 lower than the lowest bank.

Of course, Zhao Hezhuo is not a fool. This benefit is limited to deposit users of Yulong Bank, and the acceptance amount is only the amount of their deposits in Yulong Bank.

As for other people, sorry, Yulong Bank has suspended the exchange of dollars for them.

After all, if Zhao Hezhuo opened his mouth, there would definitely be people from other banks who would come to Yulong Bank to accept US dollars with large sums of Hong Kong dollars.

Of course, for Zhao Hezhuo, who already knew the result, it was actually losing money.

But after Zhao Hezhuo suggested to Li Zhiwen, Li Zhiwen nodded in agreement.

For this time, Yulong Bank is at a loss, but after the exchange rate stabilizes in the future, Yulong Bank will definitely stand out in the hearts of Hong Kong citizens and indirectly advertise Yulong Bank.

The reason why Li Zhiwen agreed is not that there is a lot of money to pay, but that Li Zhiwen understands that this situation will not last long, because the major banks cannot persist and will soon stop the exchange.

The panic continued, and some depositors who accepted US dollar deposits had already deeply distrusted the bank at this time, so they demanded to withdraw their US dollar deposits into US dollars.

At the beginning, this item can still be carried out, but with it, more and more people are going to draw cats and tigers.

US dollars cannot be exchanged, so I can exchange them for British pounds, Australian dollars, or even francs.

Anyway, as long as it is not Hong Kong dollar, any foreign currency can be accepted.

And at the beginning of September 20th, this work could continue, but it would not be able to go on the next day.

The major banks in Hong Kong have begun to stop the exchange of Hong Kong dollars with foreign currencies. uukanshu. com also stopped the withdrawal business.

This act seems to have been rehearsed before, and the major banks all agree, but in fact, everyone did not meet or discuss, at least Yulong Bank did not receive news.

And since other banks have stopped exchange and withdrawals, Yulong Bank will not show it at this time. After all, it has done enough to show off, and it will become the target of public criticism if it continues to stand out from the crowd.

Therefore, Yulong Bank also stopped the exchange and cash withdrawal business.

This panic in the financial industry quickly spread to other areas of Heung Kong.

At this time, the gold shop announced that the purchase of gold jewelry should be settled in US dollars and refused to accept Hong Kong dollars.

After all, for now, when there is no way to hoard foreign currency, it is the same reason to hoard gold jewelry.

And all this seems to be invisible to the Hong Kong Governor's Office on the Peak of the Peaceful Mountain. No orders have been issued, and they are all watching from the sidelines.

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