Black Saturday, 24 September 1983, is the name given to the crisis when the

Hong Kong dollar The Hong Kong dollar (, sign: HK$; code: HKD) is the official currency of the Hong Kong Special Administrative Region. It is subdivided into 100 cents or 1000 mils. The Hong Kong Monetary Authority is the monetary authority of Hong Kong ...

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 List of cities in China, city and Special administrative regions of China, special ...

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 ...

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 from 1975 to 1990. She was the first female British prime ...

's visit to

Beijing } Beijing ( ; ; ), Chinese postal romanization, alternatively romanized as Peking ( ), is the Capital city, capital of the China, People's Republic of China. It is the center of power and development of the country. Beijing is the world's Li ...

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(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 ...

on 17 October 1983.

References

{{Financial crises 1980s economic history Market trends 1983 in Hong Kong Economy of Hong Kong Financial crises

History

Response

See also

References