The impact of exchange control on foreign direct investment (FDI) in Malaysia for period 1996 To 2001 / Fatimah Satim

The East Asian Financial Crisis started in July 1997. When Thailand, Indonesia and South Korea took the IMF “rescue packages”, Malaysia opted to reject IMF and decided to pursue its own strategies to tackle the crisis, among others, by imposing a selective exchange control. This drew strong criticisms, notably from IMF and its proponents. On September 2, 1998 Malaysia decided to peg the ringgit against US $ at RM3.80 to US $1 and that the ringgit was no longer traded outside the country. This project attempts to study the impact of the exchange control, if any, on FDI in Malaysia, other than the effectiveness of the control in containing the financial crisis. The research, using hypothesis testing technique using the t-test statistics and ANOVA analysis, is based on the approved FDI for five consecutive years covering 1996 to 2000.