| Posted: Tue May 14, 2013 11:48 am Post subject: / Hong Kong dollar to USD - 7.8? |
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The Hong Kong dollar is "pegged" to the USD at an exchange rate of 1 USD to 7.8 HKD. But the "peg" is not a "fixed rate" - rather it is a guaranteed rate that banks can use to convert money with the Hong Kong Monetary Authority (HKMA).
Banks are free to use a different rate when dealing with their customers, such as you and me or other banks, but in practice if they try to use too different a rate then at least some of their customers (the banks) will just go to the HKMA instead.
So this creates a "pressure" to keep the exchange rate around 7.8, but doesn't actually FIX it there.
WHich is why when you change money at a money changer, or at a bank, or via an online system like Paypal then you are liable to get a slightly different rate.
If it is a lot different though then you are probably not getting a good deal and should try somewhere else.
I hope that helps to explain it, at least as well as I understand it and I'm not economist! |
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