MOP (Macanese Pataca): What It is, How It Works

What Is the MOP (Macanese Pataca)?

The Macanese pataca (MOP) is the official currency of Macau, a special administrative region (SAR) of China. Macau was formerly a Portuguese colony before becoming a SAR of China in Dec. 1999.

The pataca is not administered by a central bank but instead by two commercial banks: the Banco Nacional Ultramarino and the Bank of China. It is pegged to the Hong Kong dollar (HKD) at a fixed exchange rate of 1:1.03. As of December 2020, 1 MOP (and 1 HKD) is equal to US $0.13.

Key Takeaways

• The Matacase pataca (MOP) is the official currency of Macau, a special administrative region of China.
• Macau was formerly a Portuguese colony and became a SAR of China in 1999.
• The pataca is pegged to the Hong Kong dollar (HKD) at a fixed exchange rate of 1:1.03.

Understanding the Macanese Pataca

The Macanese pataca, introduced in 1894, replaced the Portuguese real at a rate of 450 to 1. Each pataca is subdivided into 100 units called avos. The term "pataca" is a Portuguese word that roughly translates to "metallic coin," used generically to describe coins in Portuguese colonies.

Before the creation of a single currency, Macau used several currencies, with the Mexican peso being the most prominent. The earliest use of the term "Macanese pataca" referred to the Mexican pesos in circulation in Macau.

In 1901, efforts were made to establish a universally accepted currency in Macau. The Banco Nacional Ultramarino was authorized to distribute banknotes denominated in pataca. The pataca gained a new identity separate from the Mexican pesos that were previously in use.

Unlike most currencies, the physical coins of the Macanese pataca were not introduced until 1952. This was due to the widespread use of Chinese coins from neighboring Canton Province in Macau, despite attempts to remove foreign currencies.

Today, the pataca is fully backed by the foreign exchange reserves of the Hong Kong dollar (HKD). Banknotes are available in denominations of 10, 20, 50, 100, 500, and 1,000 patacas, and coins are available in denominations of 10, 20, and 50 avos. Larger coins, in denominations of 1, 2, 5, and 20 patacas, are also in circulation. The MOP’s exchange rate has held relatively stable against the U.S. dollar, trading between 7.80 and 8.10 MOP per USD from 2009 to 2019. Its average inflation rate during that time frame was slightly below 4% per year.

Macau as a Special Administrative Region

Macau is an SAR of China, similar to Hong Kong, operating under the "One Country, Two Systems" principle. This allows Macau to maintain autonomy and control over its governmental and economic activities.

Macau serves as one of China’s main gateways to international commerce, alongside Hong Kong. Its service sector dominates the local economy, representing around 95% of Macau’s gross domestic product (GDP). Known as the "Las Vegas of Asia," Macau’s thriving tourism, gambling, and service industries contribute to its GDP of over US$50 billion. Macau is also considered a tax haven for residents of Asian and Oceanic countries.