The relationships between managed floating exchange rate with Kuala Lumpur Composite Index (KLCI) and Second Board Index / Zuraida Abd Hamid

This project paper is conducted in order to answer the question whether the managed floating exchange rate has relationship with Kuala Lumpur Composite Index and Second Board Index. The study focuses on economic growth that has been recorded after the Malaysian Government depegs the ringgit and moved to a managed float system which is from July 2005 to December 2006. The data has been collected on daily basis for 379 days from Bursa Malaysia. Here, exchange rate (RM per US Dollar) is considered as dependent variable and Kuala Lumpur Composite Index and Second Board Index (closing price) are considered as independent variables. As a main interest of this study is to determine significance relationship between exchange rate with Kuala Lumpur Composite Index and Second Board Index, the multiple regression analysis is used. Based on the analysis that has been done, it is clearly shows that the exchange rate has significant relationship with Kuala Lumpur Composite Index and Second Board Index. As a result, Kuala Lumpur Composite Index and Second Board Index have a negative relationship with exchange rate. Upon completing this study, several recommendations are given based on the findings and analysis of the study in order to make the study more understandable and more significant.