In recent months, the exchange rate between the Hong Kong Dollar (HKD) and the Pakistani Rupee (PKR) has been influenced by significant developments in both economies. Currently, the HKD to PKR rate stands near 60-day lows at approximately 36.13, just below its 3-month average, exhibiting a stable trading range of 2.4% from 35.69 to 36.54.
For the HKD, the Hong Kong Monetary Authority (HKMA) has taken proactive measures to support the currency, most notably through a 25 basis point interest rate cut and interventions in the foreign exchange market. Analysts point out that these actions are intended to maintain stability, especially as the HKD approaches the lower end of its trading band due to global economic pressures.
Meanwhile, the PKR is facing challenges attributed to geopolitical tensions and economic instability. Since January 2025, a 12% depreciation against the US dollar has been recorded, with forecasts suggesting further declines that could see the exchange rate hitting 100 PKR/USD by early 2026. Central Bank interventions, including $9 billion in purchases to support the currency, illustrate their commitment to stabilizing the PKR. The recent IMF loan, aimed at implementing necessary economic reforms, may offer long-term support despite anticipated short-term inflationary effects.
Additionally, a crackdown on illegal currency markets by Pakistan's intelligence agency has provided some respite for the PKR, as it reduces dollar speculation and fosters steadiness. However, the mix of ongoing geopolitical uncertainties and the rigorous measures by the State Bank of Pakistan raises questions about the PKR's stability moving forward.
In conclusion, while the HKD's depreciation risk seems mitigated by the HKMA's recent interventions, the PKR faces ongoing volatility linked to broader economic and geopolitical issues. Market participants should take note of these developments as they can have a direct impact on international transactions involving HKD and PKR.
