The relationship of monetary dynamics and exchange rate in Malaysia / Ervinna Maslina Abd Muslikh Mashuri

Abd Muslikh Mashuri, Ervinna Maslina (2007) The relationship of monetary dynamics and exchange rate in Malaysia / Ervinna Maslina Abd Muslikh Mashuri. [Student Project] (Unpublished)

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Abstract

This paper examines the existence of relationship of monetary dynamics and exchange rate in Malaysia that focus on demand for narrow and broad money balances. The objective of this study reveals the existence of a relationship among real money balances, real income, interest rate and exchange rate. The data for Malaysia are used as a case study. The variables used in this study are exchange rate (RM/USD), real income (GDP), and interest rate (T-bill) as independent variables and Narrow money (Ml) and Broad money (M2) as dependent variables. The quarterly period examined is 1994:Q3 — 2006:Q4 (50 observations). These studies use multiple regression models to investigate the relationship between real money balances and their determinants, exchange rate, real income and interest rate. Generally, results from testing the hypothesis of multiple regression models confirm that both money balances (real Ml and M2) have highly significant relationship with their determinants. Despite, interest rate has a significant contributor to narrow money (Ml) but not to broad money (M2). It is shown that the demand for money can be more stable by the inclusion of the exchange rate.

Metadata

Item Type: Student Project
Creators:
Creators
Email
Abd Muslikh Mashuri, Ervinna Maslina
2005655670
Contributors:
Contribution
Name
Email / ID Num.
Thesis advisor
Latib, Abdullah
UNSPECIFIED
Subjects: H Social Sciences > HG Finance > Interest rates
H Social Sciences > HG Finance > Money
H Social Sciences > HG Finance > Monetary policy
Divisions: Universiti Teknologi MARA, Johor > Segamat Campus > Faculty of Business and Management
Programme: Bachelor of Business Administrations (Finance)
Item ID: 34103
Uncontrolled Keywords: Exchange Rates; Interest Rates; Money; UiTM Cawangan Johor
URI: https://ir.uitm.edu.my/id/eprint/34103

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