Impact of Macroeconomic Variables on Values of Currencies (Malaysia Ringgit)

Poon, Chun Yin (2023) Impact of Macroeconomic Variables on Values of Currencies (Malaysia Ringgit). Final Year Project (Bachelor), Tunku Abdul Rahman University of Management and Technology.

Text Poon Chun Yin_Full Report.pdf Restricted to Registered users only Download (1MB)

Abstract

This paper focused to investigate the impact of macroeconomic variables on values of currencies (Malaysia Ringgit). This paper utilizes different independent variables. For example, Gross Domestic Products (GDP), Inflation Rate (CPI), Interest Rate (IR), Foreign Direct Investment (FDI), Trade Openness (TRADE), and Money Supply (MS) to examines the long run and short run relationship between currency rate. Towards the objectives of this assignment, this paper employed OLS, ARDL, unit root test, diagnostic tests, and stability test. It shows that there is long-run relationship between currency rate and some of the independent variables. Meanwhile, there is short-run relationship between currency rate and all independent variables. The result shows they are significant in test but depends on long-run or short-run accordingly.