The recent performance of the Indian Rupee (INR) against the Hong Kong Dollar (HKD) has been shaped by a confluence of local economic pressures and broader international market dynamics. As of December 4, 2025, the INR has experienced significant depreciation, reaching a record low of 90.42 per U.S. dollar, a decline of 5% over the past year. Analysts cite the widening trade deficit, exacerbated by elevated U.S. tariffs on Indian exports, as a primary factor driving down the currency. Additionally, substantial foreign investment outflows, totaling nearly $17 billion from Indian equities in 2025, have intensified the pressure on the INR.
The Reserve Bank of India's (RBI) recent policy shift to tolerate a weaker rupee further underscores the challenges facing the currency. The central bank appears to be more focused on mitigating excessive volatility rather than maintaining a fixed exchange rate, which could hint at continued depreciation prospects if foreign capital remains subdued. One of India's largest private lenders has projected that without a swift U.S. trade deal, the rupee could drop to 92 against the dollar, indicating a bearish sentiment regarding the currency's near-term outlook.
In contrast, the Hong Kong Dollar (HKD) has seen a more stable environment thanks to recent interest rate cuts by the Hong Kong Monetary Authority (HKMA), which reduced its base rate to 4.25% to stimulate the economy. The HKMA has actively intervened in the forex market to strengthen the HKD, engaging in purchases to maintain the currency within its peg range against the U.S. dollar. These interventions have fostered increased banking system liquidity, impacting short-term interest rates and influencing carry trade activities.
Currently, the INR to HKD rate is at 0.086546, which is approximately 1.4% below its three-month average of 0.08775, highlighting a stable performance within a narrow range from 0.086326 to 0.088582. Market analysts suggest that this stability reflects a contrasting landscape between the downward pressures on the INR and the HKD's resilience amid systematic interventions.
Overall, currency forecast experts advise monitoring developments closely around U.S.-India trade relations and any subsequent RBI policy changes, as these factors are expected to significantly influence the INR's trajectory against the HKD in the coming months.
