Factor that affects the exchange rate in Malaysia / Muhammad Faris Abd Razak

Exchange rate is defined as the price of a nation's currency in terms of another currency. It can be separate to two components, which is domestic currency and foreign currency and can be quoted either directly or indirectly. Most exchange rate use US dollar as the base currency and other currencies as the counter currency. Therefore, the purpose of this research is to examine the determinants that affect the movement of exchange rate performance in Malaysia. The research is based on monthly data, starting from the July 2007 to August 2014. The multiple linear regressions are used in this study to assess the significant between the dependent variable that are exchange rate performance and independent variables that are inflation rate, stock market, gross domestic product, money supply and interest rate. The main findings suggest that Malaysian exchange rate is determined by changes in macroeconomic determinants, namely: inflation rate, stock market, gross domestic product (export), money supply and interest rate.