Black Saturday, 24 September 1983, is the name given to the crisis when the
Hong Kong dollar
The Hong Kong dollar (, currency symbol, sign: HK$; ISO 4217, code: HKD) is the official currency of the Hong Kong, Hong Kong Special Administrative Region. It is subdivided into 100 cent (currency), cents or 1000 Mill (currency), mils. The H ...
exchange rate versus the
United States dollar
The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...
was at an all-time low. On that day, US$1 exchanged for HK$9.6. For a period,
Hong Kong
Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...
stores began quoting products in US dollar prices, because of the uncertain fluctuation in domestic currency.
History
From November 1974 to October 1983, Hong Kong was under a floating rate regime. The political talks of Hong Kong's
handover of sovereignty to China involving
UK's
Prime Minister
A prime minister, premier or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. Under those systems, a prime minister is not ...
Margaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013) was Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party (UK), Leader of the Conservative Party from 1975 to 1990. S ...
's visit to
Beijing
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Beijing ( ; ; ), alternatively romanized as Peking ( ), is the capital of the People's Republic of China. It is the center of power and development of the country. Beijing is the world's most populous national capital city, with over 21 ...
began to send consumer confidence down in 1982. The stalling of the
Sino-British Joint Declaration
The Sino-British Joint Declaration is a treaty between the governments of the United Kingdom and China signed in 1984 setting the conditions in which Hong Kong was transferred to Chinese control and for the governance of the territory after ...
also contributed to a pessimistic attitude. The collection of events eventually resulted in "Black Saturday”, which came in the form of a currency, banking and fiscal crisis.
[Jao YC. ]001 001, O01, or OO1 may refer to:
*1 (number), a number, a numeral
*001, fictional British agent, see 00 Agent
*001, former emergency telephone number for the Norwegian fire brigade (until 1986)
*AM-RB 001, the code-name for the Aston Martin Valkyrie ...
(2001). The Asian Financial Crisis and the Ordeal of Hong Kong. Quorum, Greenwood.
Response
The government responded with a
linked exchange rate
A linked exchange rate system is a type of exchange rate regime that pegs the exchange rate of one currency to another. It is the exchange rate system implemented in Hong Kong to stabilise the exchange rate between the Hong Kong dollar (HKD) and t ...
on 17 October 1983.
See also
*
Economic bubble
An economic bubble (also called a speculative bubble or a financial bubble) is a period when current asset prices greatly exceed their intrinsic valuation, being the valuation that the underlying long-term fundamentals justify. Bubbles can be c ...
References
{{Financial crises
1980s economic history
Market trends
1983 in Hong Kong
Economy of Hong Kong
Financial crises