The determinant of government bond yields in Malaysia (2010 - 2016) / Michelle Daphne Nyopin

The purpose for this study is to determine the relationship between macroeconomic variable and
the government bond yield in Malaysia. Empirical evidence obtained from Ordinary Least
Square (OLS) and the studies utilize the time series data from year 2010 to year 2016. The
Malaysia government bond yield were used as dependent variable whereby government budget
deficit(GBD), government debt (GD), consumer price index (CPI) and interest rate (IR) were
used as independent variable. Ordinary Least Square (OLS) study that the government debt (GD)
has positive and significance relationship with government bond yield. However, government
budget deficit (GBD) shows positive relationship with government bond yield but not
significance while consumer price index (CPI) is negative but significantly related and interest
rate (IR) show negative relationship and insignificance relationship with government bond yield.
Therefore, government should use both fiscal policy and monetary policy to control and stabilize
the macroeconomic indicator that may have impact on Malaysia government bond yield.