Recent forecasts for the HKD to CNY exchange rate reflect a cautious outlook amid ongoing monetary policy shifts in both Hong Kong and mainland China. Analysts note that Hong Kong's Monetary Authority (HKMA) has implemented interest rate cuts in September and October 2025, reducing the base rate to 4.25%. This move aligns with the U.S. Federal Reserve's trajectory and is intended to stabilize the HKD, particularly after interventions in the foreign exchange market where HKMA purchased substantial amounts of HKD to support its value.
The current rate of HKD to CNY is roughly 0.9129, which falls just below the three-month average, indicating a limited range of stability between 0.9124 and 0.9183. With declining interbank rates and increasing liquidity, the HKD's position within the trading band could potentially weaken without further interventions from the HKMA.
On the other hand, forecasts for the Chinese yuan suggest a strengthening trend moving forward. Major investment firms anticipate that the yuan could break the critical 7-yuan-per-dollar level by 2026, driven by narrowing interest rate differentials and improving trade dynamics. This optimism comes alongside China's initiatives to enhance the yuan's role in international markets and stabilize its exchange rate amid pressures from economic challenges.
While rating agencies and market forecasters recognize the overall strength of the yuan, they emphasize that currency dynamics will vary based on global economic conditions. The People's Bank of China has also indicated a commitment to maintaining stability, aiming to mitigate excessive fluctuations that could destabilize the currency's value.
In summary, the HKD is facing downward pressure due to recent interest rate cuts and ongoing market interventions, while the CNY is expected to gain strength in the longer term, driven by improving economic indicators and strategic policy initiatives. Transaction costs might fluctuate, and businesses engaging in currency exchanges should stay informed on these developments to optimize their international transactions.
