The determinants of the exchange rate movement in Malaysia / Najlaa Zahirah Hossen

The changes in the economy development have given different effects to the foreign
exchange rate in Malaysia (RM) in which the exchange rate influences the purchasing power
of the imports and exports of goods. The persistent level of fluctuations in Ringgit Malaysia
(RM) has cause of concern in income and the capital gain, as well as the exchange rates can
affect the trading relationship between two nations. In order to gained the results of
fluctuations of foreign exchange rate in Malaysia, this report is created to investigate about
the factors that affect the exchange rate in Malaysia. Due to that the independent variables
that are chosen to investigate this matter are the inflation rate, current account balance,
lending rate and terms of trade and the dependent variable is the exchange rate of the Ringgit
Malaysia. The total data that have been collected are thirty quarterly data that have been
taken from the year 2007 to the year 2014. Multiple Linear Regression Model is employed in
order to analyze about the relationship between the variables.