The exchange rate between the Hong Kong Dollar (HKD) and the Pakistani Rupee (PKR) has been influenced by a combination of recent monetary policy changes in Hong Kong and significant geopolitical and economic factors affecting Pakistan. Currently, the HKD is trading at 36.34 PKR, hovering near its three-month average, and showing a stable movement within a 1.8% range, from 35.90 to 36.54 PKR.
In Hong Kong, the HKMA has implemented interest rate cuts, reducing the base rate down to 4.25% as of October 2025. Analysts suggest that these rate cuts, aimed at supporting the currency amidst fluctuations, could lead to a weaker HKD as lower interest rates often diminish foreign capital inflow. Additionally, the HKMA's interventions in the foreign exchange market, where it has purchased substantial amounts of HKD to bolster its value, indicate a proactive stance to maintain currency stability amidst these rate changes.
On the other hand, the PKR faces significant challenges. The ongoing geopolitical tensions have resulted in a 12% depreciation of the PKR against the US dollar this year, with predictions suggesting a target rate of 100 PKR/USD by year-end. However, a noteworthy surge in remittances has provided a counterbalance, enhancing foreign exchange reserves and slightly supporting the PKR's value. The IMF agreement has also positively influenced market sentiment, leading to a brief appreciation of the PKR.
Experts indicate that while the HKD remains relatively stable, the overarching uncertainties regarding Pakistan's political stability and economic outlook may continue to exert downward pressure on the PKR. As a result, businesses and individuals engaged in cross-border transactions should remain vigilant to fluctuations in the HKD/PKR exchange rate, which could be influenced by developments in either region.
In summary, while the HKD appears stable for the moment, the volatile backdrop for the PKR and ongoing interventions by both central banks suggest that caution is warranted when considering transactions in this currency pair.
