The Macau pataca or Macanese pataca (Pataca de Macau; sign: MOP$; code: MOP) is the currency of Macau. It is subdivided into 100 avos (仙; sin), with 10 avos called ho (毫) in Cantonese. The abbreviation MOP$ is commonly used.
Macau has a currency board system under which the legal tender, Macau pataca, is 100 percent backed by foreign exchange reserves, in this case currently the Hong Kong dollar. Moreover, the currency board, Monetary Authority of Macau (AMCM), has a statutory obligation to issue and redeem Macau pataca on demand against the Hong Kong dollar at a fixed exchange rate of HK$1 = MOP$1.03, and without limit.
The pataca was introduced in Portuguese Macau and Portuguese Timor in the year 1894, but only as a unit of account. The unit initially corresponded to the Mexican Peso, and it replaced the Portuguese real at a rate of 1 pataca = 450 reais. The name pataca derives from the fact that the Portuguese always referred to the Mexican Peso as the pataca mexicana.
At the end of the nineteenth century, there was no single currency in use in Macau, but the predominant circulating coins were the silver Mexican dollars, the British silver trade dollars of Hong Kong and the Straits Settlements, as well as the silver dollars and fractional coinage of the neighbouring province of Canton. In 1901, it was decided to have a uniquely Macau currency, and for that purpose, the Banco Nacional Ultramarino was granted exclusive rights to issue legal tender banknotes that were to be denominated in patacas. On January 27, 1906, pataca notes in denominations of 1, 5, 50 and 100 were introduced and all foreign coinage was outlawed, the idea being to make the pataca paper notes the sole legal tender currency in Macau. However, the Chinese, being so accustomed to using silver for barter, were suspicious of this new paper money, and as such, the paper pataca always circulated at a discount in relation to the silver dollar coins. On the contrary, a similar action at exactly the same time in the Straits Settlements, and for the same purpose, had the different effect of putting the new Straits dollar into the gold exchange standard. Hence both the Macau pataca and the Straits dollar were launched at a sterling value of 2 shillings and 4 pence, but where the Straits dollar remained at that value until the 1960s, the Macau pataca fluctuated with the value of silver, just like the Hong Kong unit.
In 1935, when Hong Kong and China abandoned the silver standard, the Hong Kong unit was pegged to sterling at a rate of 1 shilling and 3 pence, while the Macau pataca was pegged to the Portuguese escudo at a rate of 5.5 escudos. This meant that the Macau pataca was worth only 1 shilling sterling and was therefore at a discount of 3 pence sterling in relation to the Hong Kong unit.
The first exclusively Macau coinage was not introduced until the year 1952, which happened to be the year after the last pataca fractional coins were minted for East Timor. In that year in Macau, denominations below 10 patacas were replaced by coins.
In 1980, the Macau government set up the Issuing Institute of Macau (Instituto Emissor de Macau; abbr. as IEM), which was given the monopoly right to issue pataca notes. The BNU became the IEM's agent bank and continued to issue banknotes. On agreement with the BNU on October 16, 1995, the Macau branch of Bank of China (中國銀行澳門分行) became the second note-issuing bank. The authority to issue patacas was transferred to the Monetary Authority of Macau.
Coins were not issued for use in Macau until 1952, with the 20 cent coin of Canton Province circulating. In 1952, bronze 5 and 10 avos, cupro-nickel 50 avos and .720 fineness silver 1 and 5 patacas were introduced. Nickel-brass replaced bronze in 1967, including the last issue of 5 avos. Nickel replaced silver in the 1 pataca in 1968. In 1971, a final (.650 fineness) silver issue of 5 patacas was produced.
Brass 10, 20 and 50 avos and cupro-nickel 1 and 5 patacas were introduced in 1982. The 20 avos and 5 patacas became dodecagonal in 1993 and 1992, respectively, whilst a bimetallic 10 patacas was introduced in 1997 and a cupronickel 2 patacas in 1998. Coins are issued by the Monetary Authority of Macau.
In a similar arrangement to the issue of banknotes in Hong Kong, Macau's banknotes are not issued by a central bank or monetary authority but by two commercial banks, the Banco Nacional Ultramarino and the Bank of China. Owing to Macau's Portuguese colonial past, banknotes are printed in Portuguese as well as Chinese, including the name of the Bank of China which is written as both "Banco da China" and "中國銀行".