Recent developments around the Hong Kong Dollar (HKD) and Malaysian Ringgit (MYR) indicate notable changes affecting the HKD to MYR exchange rate. Analysts observe that the HKD has faced downward pressure largely due to recent interest rate cuts by the Hong Kong Monetary Authority (HKMA), which lowered the base rate to 4.25% in late October, aligning with U.S. Federal Reserve moves. This environment of lower interest rates has the potential to weaken the HKD as investors seek higher returns in other markets.
In a bid to stabilize the currency, the HKMA has enacted interventions in the foreign exchange market, purchasing significant amounts of HKD. However, despite these interventions, the HKD is currently trading at 0.5331 to MYR, approximately 1.3% below its three-month average of 0.5401 within a relatively stable range. This trend suggests weak demand for the HKD amidst the declining interest rate environment.
Conversely, the MYR has shown strength recently, driven by a positive economic outlook and strong GDP growth of 5.2% in Q3 2025. The currency has appreciated to a 13-month high, bolstered by stable interest rates maintained by Bank Negara Malaysia at 3%, which has reinforced investor confidence. Additionally, the recent ASEAN Summit trade deals have improved export prospects for Malaysia, further supporting the MYR.
The performance of oil prices will also influence the MYR, as significant fluctuations in oil can impact Malaysia’s trade balance and revenues. Recent data indicates that oil is trading at 62.56 USD, which is 4.4% below its three-month average, highlighting some volatility that may eventually affect the MYR.
In summary, ongoing interest rate cuts and currency interventions may put downward pressure on the HKD, while favorable economic conditions and trade agreements seem to be uplifting the MYR. As such, the forecast suggests a continuation of this trend, potentially favoring the MYR against the HKD in the coming weeks.
