Jurnal Ekonomi Malaysia
55 (2) 2021 81 – 89
Department of Economics
Faculty of Business and Management
Universiti Teknologi MARA
Cawangan Terengganu Kampus Dungun (UiTM)
23000 Dungun, Terengganu
MALAYSIA.
Putra Business School
43400 UPM Serdang, Selangor
MALAYSIA
EIS-UPMCS Centre for Future Labour Market Studies
Menara PERKESO Putrajaya
No. 6, Persiaran Perdana, Presint 2
62100 Putrajaya
MALAYSIA.
Department of Finance
Faculty of Business and Management
Universiti Teknologi MARA
Cawangan Terengganu Kampus Dungun (UiTM)
23000 Dungun, Terengganu
MALAYSIA.
Department of Finance
Faculty of Business and Management
Universiti Teknologi MARA
CawanganTerengganu Kampus Dungun (UiTM)
23000 Dungun, Terengganu
MALAYSIA.
Abstract
The aim of this paper is to estimate the equilibrium of exchange rates and identify the roles of macroeconomics fundamentals affecting exchange rates using Malaysian data spanning 1970 to 2019. This study adopts the Autoregressive Distributed Lag model to examine the long-run relationships or cointegration among variables and the dynamic effect within variables in the short-run over the sample period. The results suggest that inflation rate and national income growth rate play important roles in influencing exchange rate movement. The results also reveal that the misalignment of exchange rates is quite small and stable during 1988 to 2019, except for 2015 which was attributed to the weaker growth in China. Consecutively, this study suggests that the parity condition is only important in the long-run in explaining exchange rates behaviour for the sample country.
Keywords
JEL Codes
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Bibliography
@article{shukri2021macroeconomic,
title={The Macroeconomic Fundamentals of the Real Exchange Rate in Malaysia: Some Empirical Evidence},
author={Johari, Mohamad Shukri and Habibullah, Muzafar and Abdul Ghani, Roseziahazni and Abdul Manaf, Suhaily Maizan},
journal={Jurnal Ekonomi Malaysia},
volume={55},
number={2},
pages={81—89},
}
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