MOP (Macanese Pataca) Defined

What Is the MOP (Macanese Pataca)?

The Macanese pataca (MOP) is the official currency of Macau. It is often presented with the symbol MOP$, as in MOP$100. Macau was formerly a Portuguese colony, and became a special administrative region (SAR) of China in Dec. 1999.

Unlike most currencies, the pataca is not administered by a central bank. Instead, it is administered 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 rate of one Hong Kong dollar to 1.03 Macanese patacas. As of December 2020, 1 MOP (and 1 HKD) is equal to US $0.13.

Understanding the Macanese Pataca

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

When it was first issued for circulation in Macau in the late 1800s, there was no single currency used in Macau. Instead, several currencies were used, the most prominent being the Mexican peso, which was referred to as the "pataca mexicana." In that sense, the earliest use of the term "Macanese pataca" actually referred to Mexican pesos that were in use in Macau.

By 1901, efforts had begun to create a single, universally accepted currency in Macau. To that end, the Banco Nacional Ultramarino — founded in Lisbon in 1864 — was authorized to distribute banknotes denominated in pataca. From this point onward, the pataca gained a new identity separate from the Mexican pesos (or "Mexican patacas") that came previously. Indeed, the Mexican pesos and all other foreign currencies were banned shortly after the issuance of these new pataca banknotes.

Unlike most currencies, in which metal coinage typically predates paper banknotes, the Macanese pataca did not receive physical coins until 1952. This is largely because Chinese coins from the neighboring Canton Province had already been widely used throughout Macau, despite the authorities' attempts to remove foreign currencies from circulation.

Today, the value of the pataca is 100% backed by the foreign exchange reserves of the HKD. Its modern banknotes are available in denominations of 10, 20, 50, 100, 500, and 1,000 patacas, while its coins are available in denominations of 10, 20, and 50 avos. Larger coins, in denominations of one, two, five, and 20 patacas, are also in circulation.

Between 2009 and 2019, the MOP's exchange rate has held relatively stable against the U.S. dollar (USD), trading in a range of between 7.80 and 8.10 MOP per USD. Its inflation rate has been fairly subdued during that time frame, averaging just under 4% per year.

Macau as a Special Administrative Region

Macau functions similarly to Hong Kong, as an SAR of China. This designation means Macau is a somewhat autonomous territory that operates under the “One Country, Two Systems” principle. This policy allows Macau to maintain autonomy and control over most of its governmental and economic activities.

Along with Hong Kong, Macau is considered one of China's foremost gateways to international commerce. Its service sector dominates the local economy, representing roughly 95% of Macau's gross domestic product (GDP). A wealthy region, Macau is known as the "Las Vegas of Asia" and rakes in more than US$50 billion in GDP, largely fueled by the tourism, gambling, and service industries. Macau is considered to be a tax haven, primarily for residents of Asian and Oceanic countries.