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Untitled Document
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Macau |
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Macau is a Chinese territory once under the Portuguese administration. It is one of the smallest modern economies in the world to maintain its own currency.
The value of Macau Pataca had originally been linked to the Portuguese Escudo. Untill the late 1960s, Macau had become a center for gambling. An important source of income for the government taxes was the gambling business, a business supported by many gamblers from Hong Kong on weekends. These people spent mainly H.K. Dollars in the casinos.
Consequently, a large part of currency in circulation in Macau was the H.K. Dollar. In this situation, the Macau authority sometimes altered the parity of Pataca to Escudo and made it in line with the H.K. Dollar. In 1973, the Pataca's exchange rate structure was operated on a modified two-tier system (exporters and importers faced different foreign rates) and in 1975, the Pataca was put on a controlled, floating basis. However, the value of Pataca was always stabilized with unchanged value to H.K. Dollar.
Since 1977, Pataca's ties to the floating Portuguese Escudo were officially replaced by a link to the Hong Kong Dollar. Although in 1989 it was announced that Pataca's link to the Hong Kong Dollar was broken and the unit was set free to float, the Pataca's effective rate has still been viewed as closely pegged to the H.K. Dollar by now.
Maucau became a Chinese special administrative region on 12/10/1999. In accordance with the "one country, two systems" principle, Macau maintains its monetary and foreign exchange system independently from Mainland China.
With its own currency pegged to another currency, which in turn is pegged to the U.S. dollar, Macau has a unique foreign exchange arrangement. Like Hong Kong, its currency is issued through the Currency Board System, the issue currency by a bank must be backed with the equivalent amount of foreign exchange. The Authority for Money and Foreign Exchange of Macau (AMCM) conducted the supervision of banks and the management of the monetary system and foreign exchange reserves in Macau.
Major Sources of Referece include:
1. World Currency Yearbook. (WCY)
2. Scott, Robert Haney(1997): " Pegged Exchange Rate Systems in Macao and Hong Kong", Multinational Finance Journal; 1(2), pages 153-68.
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Date
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Changes
to the exchange rate regime
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Pataca per U.S. Dollar
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| November 1967 | The Asian enclave of Macau devalued its Pataca, bringing it into line with the Hong Kong Dollar and making 4.75 Escudos equal to 1.00 Pataca. (WCY 1990-1993, p.472) | 6.050 | | November 1967 | The Asian enclave of Macau devalued its Pataca, bringing it into line with the Hong Kong Dollar and making 4.75 Escudos equal to 1.00 Pataca. (WCY 1990-1993, p.472) | 6.050 | | 15 August 1971 | Following the de facto devaluation of the U.S. Dollar, the Pataca began to appreciation against the American unit. (WCY 1990-1993, p.472) | | | December 1971 | In the wake of the U.S. Dollar devaluation, the Pataca's value in terms of Hong Kong Dollar, as well as in terms of gold, remained unchanged, thereby realigning the Official Rate. (WCY 1990-1993, p.472) | 5.580 | | 23 June 1972 | With the floating of the Hong Kong Dollar, the Pataca was also allowed to depreciate in tandem, thus effecting a de facto devaluation. (WCY 1990-1993, p.472) | | | 6 July 1972 | The Official Rate of the enclave's currency was reset. The new rate represented a 1.2% devaluation in terms of gold and thus maintaining unchanged its parity with the Hong Kong Dollar. (WCY 1990-1993, p.472) | 5.650 | | 14 February 1973 | Following the U.S. devaluation, the Official Rate of Pataca, based on the unit's unchanged gold content, was realigned. (WCY 1990-1993, p.472) | 5.085 | | 26 March 1973 | The parity of Portuguese Escudo against the Pataca was altered from Esc 4.75 to Esc 5.015 per Macao unit. The Pataca's exchange rate structure operated on a modified two-tier system. While the unit was pegged to the Hong Kong Dollar on a 1:1 basis, there was an Export Rate of P100.25 per HK$100 and an Import Rate of P103.25 per HK$100 for purchases of foodstuffs and essential commodities. (WCY 1990-1993, p.472) | | | July 1975 | The currency was placed on a controlled, floating basis and stabilized at around P1.06 per Hong Kong Dollar. (WCY 1990-1993, p.472) | | | October 1975 | The controlled float was abandoned, and the currency was left to float freely, dropping to P1.25 per Hong Kong Dollar. (WCY 1990-1993, p.472) | | | 9 April 1977 | The Pataca underwent a technical upvaluation, as its ties to the floating Portuguese Escudo were replaced by a link to the floating Hong Kong Dollar. The historic relationship of 5.015 Escudos equals 1.00 Pataca was abandoned for the new tie of 1.00 Hong Kong Dollar equals 1.075 Patacas. (WCY 1990-1993, p.472) | | | 31 December 1978 | The Pataca's link to the Hong Kong Dollar was upgrated to P1.00=HK$1.00. (WCY 1990-1993, p.472) | | | 1 January 1979 | The Pataca's link to the Hong Kong Dollar was downgrated to P1.075=HK$1.00. (WCY 1990-1993, p.472) | | | 1982 | The Pataca was realigned to P1.03=HK$1.00. (WCY 1990-1993, p.472) | | | 31 December 1985 | | 8.048 | | 31 December 1986 | | 8.037 | | 31 December 1987 | | 8.001 | | 31 December 1988 | | 8.043 | | 1 February 1989 | The Pataca's link to the Hong Kong Dollar was broken and the unit was set free to float. It was expected to follow closely the Hong Kong Dollar-Renminbi exchange rate. (WCY 1990-1993, p.472) | | | 31 December 1989 | | 8.045 | | 31 December 1990 | | 8.034 | | 31 December 1991 | | 8.014 | | 1993 | The government of Macau passed an ordinance requiring local businesses to list the prices of goods in Patacas, probably because of fear that the HK dollar might displace the pataca in Macau. Nevertheless, the government does not discourage the circulation of HK dollars and other foreign currency in Macau. (Scott, 1997) | | | 31 December 1993 | | 7.956 |
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