Recent developments in the currency markets indicate that the exchange rate from Hong Kong Dollar (HKD) to Pakistani Rupee (PKR) has been influenced by a variety of economic and geopolitical factors. Analysts note that the HKD has recently been trading at approximately 36.19 PKR, which is just below its three-month average, demonstrating stability within a narrow range of 36.03 to 36.54 PKR.
On the side of the HKD, the Hong Kong Monetary Authority (HKMA) has implemented two interest rate cuts in recent months, reducing the base rate from 4.50% to 4.25%, in response to similar actions by the U.S. Federal Reserve. Such cuts typically weaken a currency, yet the HKD has shown resilience due to ongoing currency interventions by the HKMA, which has worked to support the HKD through direct purchases in the foreign exchange market. This combination of reduced interest rates and active market intervention suggests a stabilizing influence on the HKD in the near term, even as liquidity conditions are impacted by these monetary actions.
Conversely, the PKR has faced substantial pressures stemming from geopolitical tensions, leading to a significant depreciation against the U.S. dollar—down 12% since January 2025. Market forecasts estimate that, by year-end, the PKR could trade at around 100 PKR/USD. However, the situation is somewhat counterbalanced by record remittances amounting to $38.3 billion for the fiscal year, which have bolstered Pakistan’s foreign exchange reserves. Additionally, an agreement with the International Monetary Fund has added some optimism to the market sentiment around the PKR, leading to a slight appreciation recently.
Despite these supportive factors, analysts caution that the State Bank of Pakistan's substantial interventions in the currency market may create artificial demand for the PKR, contradicting the underlying market fundamentals. This could pose risks for the PKR in the long term as stability relies on genuine economic improvements.
Overall, currency forecasters believe that the interplay of these factors will maintain the HKD to PKR exchange rate within its current range. However, ongoing geopolitical tensions and domestic economic challenges will continue to exert pressure on the PKR, potentially creating volatility in future exchanges. Individuals and businesses engaged in international transactions should remain vigilant and consider timing their conversions accordingly to mitigate adverse impacts from these macroeconomic developments.
