The Hong Kong Dollar (HKD) has exhibited notable fluctuations in recent months, influenced significantly by the Hong Kong Monetary Authority’s (HKMA) interventions to maintain its currency peg against the US Dollar (USD). As of December 22, 2025, the HKD has reached near 90-day highs at 0.1287 against the USD, trading within a narrow 0.2% range from 0.1284 to 0.1287, indicating relative stability in a historically volatile environment.
In May, the HKD appreciated to the strong-side limit of 7.75 against the USD, prompting the HKMA to sell HK$129.4 billion to uphold the peg. However, June saw a downturn as the currency depreciated to the weak-side limit of 7.85, leading to HKMA intervention through the purchase of HK$9.42 billion. Such interventions have been key in signaling the HKMA's commitment to stabilizing the HKD amid shifting market dynamics.
Interest rates have played a crucial role in the HKD's movements, particularly with Hong Kong Interbank Offered Rates (HIBOR) dropping dramatically to near zero following the HKMA’s liquidity injections. As market conditions evolved, HIBOR began to rise again in August as the HKMA withdrew liquidity to stabilize the currency. This shift contributed to the HKD’s rebound, supported further by increased mainland capital flows.
Across other currency pairs, the HKD is trading at slightly lower levels against the Euro and the British Pound. The HKD to EUR rate at 0.1093 is 1.0% below its three-month average of 0.1104, with a stable trading range of 2.7%. Similarly, the HKD to GBP has been marked at 0.0953, 1.4% below its three-month average, within a narrow range. In contrast, against the Japanese yen, the HKD is performing well, trading at 20.15, which is 1.9% above its three-month average, demonstrating strength in this particular pair.
Analysts note the ongoing significance of the HKMA's interventions in the currency market, with expectations that the authority may adjust its strategies to respond to evolving economic conditions and maintain HKD's stability within the peg system. For businesses and individuals engaged in international transactions, these developments highlight the importance of monitoring exchange rate movements and market conditions closely, as they could present opportunities or risks impacting costs.
