Recent developments indicate that the Hong Kong Dollar (HKD) is navigating a complex landscape influenced by changes in interest rates and central bank interventions. On September 18, 2025, the Hong Kong Monetary Authority (HKMA) cut its base interest rate by 25 basis points to 4.50%, marking its first reduction since December 2024. This move was in alignment with the U.S. Federal Reserve's rate cut, which may have implications for cross-border flows and investor sentiment towards the HKD.
In addition to the interest rate adjustment, the HKMA has been actively engaged in foreign exchange interventions. Notably, on July 30, 2025, the authority intervened by purchasing nearly HK$4 billion to support the HKD as it faced increasing market pressure. Earlier, on June 26, 2025, the HKMA triggered the weak-side Convertibility Undertaking, selling US dollars to buy HK$9.42 billion, reflecting proactive measures to maintain the currency's stability within its pegged range.
Recent price data for key currency pairs shows the HKD performing robustly. The exchange rate against the US dollar is currently at 90-day highs near 0.1287, just above its three-month average, indicating a stable range of 1.0% from 0.1274 to 0.1287. Similarly, the HKD to Euro is trading at 7-day highs near 0.1109, surpassing its three-month average by 1.0%. This pair has maintained a narrow trading range of 3.2% from 0.1082 to 0.1117.
The exchange rate of HKD to GBP shows strong performance as well, currently at 7-day highs near 0.096390, being 1.1% above the three-month average with a stable range of 3.0% from 0.093797 to 0.096596. As for the HKD to JPY, it is at 7-day highs around 19.56, a notable 2.8% above its three-month average and exhibiting a steady range of 5.4% from 18.66 to 19.67.
Overall, analysts suggest that the HKD remains resilient, bolstered by the HKMA's strategic interventions and recent interest rate cuts. Continuous monitoring of international economic indicators and further actions from the HKMA will be essential in assessing the ongoing stability and value of the HKD in the currency markets.
