The Hong Kong Monetary Authority published its report on Currency Board Operations for Dec. 30, 2025 to April 22, 2026, showing that the Hong Kong dollar traded within 7.7818 to 7.8387 against the USD and that the Linked Exchange Rate System continued to function smoothly. The Convertibility Undertakings were not triggered, the Aggregate Balance stayed around HKD 54 billion, and no abnormality was recorded in Discount Window usage. The Monetary Base rose to HKD 2,061.37 billion by the end of the review period, with all changes fully matched by changes in foreign reserves in line with Currency Board principles. During the period, the HKD weakened early in 2026 as HIBOR softened after year-end funding demand faded, increasing incentives for carry trades. It then strengthened in early March as investors unwound short HKD positions amid uncertainty linked to the Middle East conflict, before weakening again as HKD rates moved below USD peers and thin liquidity amplified spot moves, then rebounding slightly near quarter-end as short positions were unwound and short-dated rates firmed. In its broader risk review, the Currency Board Sub-Committee highlighted the Iran conflict, higher energy prices, financial market sell-offs and renewed US trade policy uncertainty as key global risks. It also noted continued export-led resilience in Asia, stronger-than-expected first-quarter activity and easing deflationary pressure in the Chinese Mainland, and continued early-2026 growth in Hong Kong supported by exports, tourism and retail sales, alongside a firmer housing market and still-pressured commercial real estate with some improvement in prime Grade A offices.

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