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You searched Library Catalogue - Title: Third edition.
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Call Number (WOU)
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SP CEMBA 2015 51
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Author
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Ong, Kin Hoong
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Title
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Long run determinants of foreign exchange rates : analysis on the case of Malaysia / Ong Kin Hoong
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Abstract
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It is the interest of policy makers, international businesses and global portfolio investors of a country to understand the behaviour of foreign exchange rate of the country’s currency. Knowing the main determinants of foreign exchange rate performance and predicting future trend of the exchange rates are necessary in policy formulation by governments, decision making and strategy planning by managers of firms that are involving in international business and global portfolio investors. Although behaviour of foreign exchange rate seems to be unpredictable, especially in the short run, the long run performance of foreign exchange rate are driven by certain macroeconomic fundamental. The determinants of foreign exchange rate long run performance may vary according to different countries, regions and during different time period. This research is carried out with the purpose to identify the long run determinants of Ringgit/US Dollar exchange rates in the current environment using a multivariate framework. The relationship between several macroeconomic variables and Ringgit/US Dollar exchange rates are examined using recent performance data of the variables from Q3 2005 to Q2 2015. Interest rates, inflation rates, crude oil prices, current account, terms of trade and foreign reserves of Malaysia from Q3 2005 to Q2 2015 are included in the investigation for the long run determinants of Ringgit/US Dollar exchange rates. The historical performance data of the variables are analysed graphically and statistically using regression analysis. As suggested by bivariate regression analysis, there is statistically significant negative correlation between Ringgit/US Dollar exchange rates and two macroeconomic variables which are crude oil prices and foreign reserves. Multivariate regression analysis indicates that interest rates, crude oil prices and foreign reserves are significant predictors of Ringgit/US Dollar exchange rates and therefore the long run determinants of foreign exchange rates in Malaysia.
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Notes
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Final project report submitted in partial fulfilment of the requirements for the Degree of Master of Business Administration (CeMBA).
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Publisher/Year
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Penang : School of Business and Administration, Wawasan Open University, 2015.
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Subject
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Exchange rates.
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Subject
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Foreign exchange -- Rates.
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