When Hong Kong Retail Stores Refused the Hong Kong Dollar

There was a time when retail stores in Hong Kong refused to accept the Hong Kong dollar. This rejection of the city’s official currency was the culmination of a year-long crisis that suddenly turned explosive over a 48-hour period.

The crisis began in September 1982, when Great Britain and the People’s Republic of China initiated discussions regarding the future of Hong Kong. China’s leader, Deng Xiaoping, took an unyielding stance, insisting on reclaiming full sovereignty over the entire territory by 1997.

The ensuing political uncertainty triggered prolonged economic instability. The value of the Hong Kong dollar—then a floating currency—slowly declined from HKD 6.50 per USD 1.00 at the start of 1983 to HKD 8.27 per USD 1.00 by September 22, 1983.

That day marked the start of the fourth round of Sino-British diplomatic talks in Beijing. Because the meeting ended in a stalemate, the general public lost faith in the negotiations, severely exacerbating the unfolding crisis.

On September 24, 1983—known as Black Saturday—panic gripped the financial markets. Within hours, the Hong Kong dollar plummeted to HKD 9.60 per USD 1.00. Residents rushed to banks to convert their local currency into US dollars, while panic buyers swarmed supermarkets. Realizing the currency was in free fall, retail stores began refusing Hong Kong dollars and demanding US dollars instead, driving the crisis to its peak.

The crisis was eventually resolved on October 17, 1983, when the Hong Kong government launched the Linked Exchange Rate System—still in force as of 2026—which pegged the Hong Kong dollar to the US dollar at a fixed rate of HKD 7.80 per USD 1.00.