The peg-unpeg of the pataca to the American dollar – indirectly via the link to the Hong Kong dollar – is a decades-old discussion. Lately however, with China’s greater prominence on the world stage, it has gathered more and more momentum.
The main reason evoked by those in favor of the de-pegging path is the fast-growing integration of Macau’s economy into the “yuan zone.” China’s emerging as a world superpower and more recently the launching of the Beijing-backed Asian Infrastructure Investment Bank (AIIB) along with other gargantuan finance/trade China-led initiatives – and subsequently the “inevitable” convertibility of the Chinese currency – are also foretokens of the unpeg movement platform.
They predict the pataca will diminish into irrelevance and soon into being but a “symbolic” currency, so they advocate the guillotine to spare the “emotionally-valuable” pataca from agonizing into oblivion.
Emotions apart, I grew fond of the local currency the moment I got my first salary in Macau and realized that I was actually getting paid in American dollars, the strongest currency at the time, when the euro was but a far distant dream.
With the pataca, I started to live and travel in a dollar-zone, with all the benefits (and minimal risks) attached. Commodities, Forex, derivatives are all traded in USD-denominated exchanges thus having extraordinary liquidity. Sure, our pataca (our dollar) has had its ups and downs – I bear witness to that – but over the years it maintained its fundamental value, being associated with the dollar.
The “silliness” of the word “pataca” reminiscent of Uncle Scrooge comics soon faded away – the old misanthropic duck’s fortune was denominated in “patacas” in the Brazilian-Portuguese version that was available in Portugal in my early boyhood, where he went by the name of “Tio Patinhas”.
So I had to wait until the 21st century and travel to Brazil to be reminded of the “funny-sounding” currency; my reading habits having long departed from Disney World literature.
From São Paulo to Rio de Janeiro, people – businessmen or not – would laugh at the mere mention of the word “pataca:” Are you serious? Are you really paid in patacas? Tio Patinhas’ money? Every time my traveling companions would meet someone they knew in the streets they would ask me: Paulo, “por favor” tell these guys: how are you paid in your place? Patacas. Strident laughs.
They were right to laugh. From what I’ve been hearing, it seems the only pataca that will survive is that of the grumpy old Scrooge. When that day comes, you better start packing.