HKD/PKR Outlook:
The HKD/PKR exchange rate is slightly positive, but likely to move sideways as it trades just below the 90-day average and remains within a narrow range. This situation shows a lack of clear drivers affecting the rate significantly.
Key drivers:
• Rate gap: The Hong Kong Monetary Authority's interventions have been aimed at stabilizing the HKD against external pressures, while the State Bank of Pakistan has seen improvements in foreign exchange reserves.
• Risk/commodities: Global oil prices have remained high, potentially causing market fluctuations that can impact both the HKD and PKR.
• One macro factor: Ongoing foreign inflows into Pakistan are helping to stabilize the PKR amidst global uncertainties.
Range:
The HKD/PKR rate is expected to hold steady within its recent 1.6% range, testing lower and upper limits as external factors fluctuate.
What could change it:
• Upside risk: Continued HKMA interventions could strengthen the HKD if demand increases.
• Downside risk: A significant drop in remittance inflows may undermine the PKR's stability.
