An empirical study conducted on the fluctuations of exchange rate / Fatin Amera Syahira Hamdan

The Foreign Exchange Market in Malaysia has gone through substantial changes over the last decade. Fluctuations in exchange rate give an impact towards the country, business as well as individual. And some people says an exchange rate of one country represent whether the country are stable or not. The stability of the country will really influence the country in term of tourism sector, and also investment decisions that will be made by the foreign investor. Thus, this study is conducted to examine the macroeconomic factors that affect the exchange rate of Malaysian Ringgit during the year 1985 to year 2015 by using multiple regression analysis with ordinary least square method (OLS). In this study. the dependent variable is MYR exchange rate; while independent variables are gross domestic product growth, external debt, inflation, interest rate, import and also export. The study utilizes yearly data from the first year 1985 to the last year 2015 which consists of 30 observations. According to the findings, there is a negative significant relationship between gross domestic product growth and MYR exchange rate; also external debt and net export show a negative significant relationship towards MYR exchange rate. For variable of inflation, import and interest rate shows a positive significant relationship towards MYR exchange rate. In conclusion, these six variables which are gross domestic product growth, external debt, inflation, interest rate, import and export have a significant relationship towards MYR exchange rate.