The Indian Rupee (INR) has recently faced significant pressures, culminating in a record low of 88.62 against the US dollar in September 2025. Analysts have attributed this decline to increased visa fees, which have dampened foreign equity inflows, and persistent importer demand for US dollars influenced by US trade policies. The Reserve Bank of India's (RBI) recent interventions, including a $6 billion expansion in short dollar forward positions, reflect attempts to stabilize the weakening currency. However, a report has indicated that factors such as weak manufacturing export growth and a narrowing policy rate differential with the US are likely to continue exerting pressure on the INR.
In terms of market stability, the INR to HKD exchange rate currently stands at 0.087131, just 0.9% below its three-month average of 0.087895. This currency pair has displayed stability with a modest trading range of 2.2%, fluctuating between 0.086835 and 0.088715. Experts suggest that these fluctuations are largely a reflection of the broader challenges facing the INR.
Simultaneously, the Hong Kong Dollar (HKD) has entered a phase of lower interest rates, following two cuts by the Hong Kong Monetary Authority (HKMA) in September and October 2025, aligning its monetary policy with movements by the US Federal Reserve. These reductions have likely aimed to bolster economic activity in light of external pressures. Furthermore, HKMA's proactive currency interventions have been noted, with significant purchases to support the HKD and maintain its peg. The recent decline of the Hong Kong Interbank Offered Rates (HIBOR) also indicates a liquidity-rich environment which could influence HKD’s performance in currency trades.
Overall, analysts forecast that the INR may continue to face headwinds against the HKD unless there is a marked improvement in external economic conditions and domestic export performance. As such, businesses and individuals engaging in transactions involving these currencies should remain vigilant and consider possible shifts in policy and market sentiment in the coming months.
