The exchange rate between the Hong Kong Dollar (HKD) and the Malaysian Ringgit (MYR) has seen significant fluctuations recently, with the HKD trading at 90-day lows of approximately 0.5281 MYR, which is 1.9% below its three-month average of 0.5385. This decline can be attributed to several factors influencing the HKD and MYR around November 2025.
Recent developments regarding the HKD include a rate cut by the Hong Kong Monetary Authority (HKMA), which lowered the base interest rate by 25 basis points to 4.25%. This decision, closely aligned with adjustments by the U.S. Federal Reserve, aims to boost local economic activity amidst increased currency intervention measures by the HKMA designed to uphold the currency peg against the USD. These interventions, coupled with declining Hong Kong Interbank Offered Rates (HIBOR), have created a challenging environment for the HKD, highlighting pressure from capital inflows and interest rate differentials.
On the other hand, the MYR has strengthened considerably, reaching a 13-month high. Analysts attribute this appreciation to robust economic growth forecasts, a favorable trade balance, and significant foreign direct investment inflows. The Malaysian government's fiscal consolidation efforts have also bolstered investor confidence, further supporting the MYR's upward trajectory. Furthermore, post-ASEAN Summit trade agreements, including tariff exemptions on over 1,700 products with the U.S., have contributed to the bullish sentiment surrounding the MYR.
Additionally, fluctuations in oil prices, which have recently reached near 14-day highs at approximately 63.75 USD per barrel, play a role in influencing the MYR, given Malaysia's status as a net oil exporter. Although oil prices are still 1.5% below their three-month average, the volatility in the oil market—trading within a 15% range—can significantly impact the MYR's performance.
Collectively, these factors suggest a continuing pressure on the HKD against the MYR due to local monetary policy adjustments and stronger economic fundamentals supporting the MYR. Analysts anticipate that the HKD may remain challenged as the MYR continues to benefit from favorable economic conditions and robust trade dynamics.
