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The relationship of monetary dynamics and exchange rate in Malaysia / Ervinna Maslina Abd Muslikh Mashuri

This paper examines the existence of relationship of monetary dynamics and exchange rate in Malaysia that focus on demand for narrow and broad money balances. The objective of this study reveals the existence of a relationship among real money balances, real income, interest rate and exchange rate....

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Main Author: Abd Muslikh Mashuri, Ervinna Maslina
Format: Student Project
Language:English
Published: 2007
Subjects:
Interest rates
Money
Monetary policy
Online Access:http://ir.uitm.edu.my/id/eprint/34103/1/34103.pdf
http://ir.uitm.edu.my/id/eprint/34103/
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spelling my.uitm.ir.341032020-10-13T07:52:10Z http://ir.uitm.edu.my/id/eprint/34103/ The relationship of monetary dynamics and exchange rate in Malaysia / Ervinna Maslina Abd Muslikh Mashuri Abd Muslikh Mashuri, Ervinna Maslina Interest rates Money Monetary policy This paper examines the existence of relationship of monetary dynamics and exchange rate in Malaysia that focus on demand for narrow and broad money balances. The objective of this study reveals the existence of a relationship among real money balances, real income, interest rate and exchange rate. The data for Malaysia are used as a case study. The variables used in this study are exchange rate (RM/USD), real income (GDP), and interest rate (T-bill) as independent variables and Narrow money (Ml) and Broad money (M2) as dependent variables. The quarterly period examined is 1994:Q3 — 2006:Q4 (50 observations). These studies use multiple regression models to investigate the relationship between real money balances and their determinants, exchange rate, real income and interest rate. Generally, results from testing the hypothesis of multiple regression models confirm that both money balances (real Ml and M2) have highly significant relationship with their determinants. Despite, interest rate has a significant contributor to narrow money (Ml) but not to broad money (M2). It is shown that the demand for money can be more stable by the inclusion of the exchange rate. 2007 Student Project NonPeerReviewed text en http://ir.uitm.edu.my/id/eprint/34103/1/34103.pdf Abd Muslikh Mashuri, Ervinna Maslina (2007) The relationship of monetary dynamics and exchange rate in Malaysia / Ervinna Maslina Abd Muslikh Mashuri. [Student Project] (Unpublished)
institution Universiti Teknologi Mara
building Tun Abdul Razak Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Mara
content_source UiTM Institutional Repository
url_provider http://ir.uitm.edu.my/
language English
topic Interest rates
Money
Monetary policy
spellingShingle Interest rates
Money
Monetary policy
Abd Muslikh Mashuri, Ervinna Maslina
The relationship of monetary dynamics and exchange rate in Malaysia / Ervinna Maslina Abd Muslikh Mashuri
description This paper examines the existence of relationship of monetary dynamics and exchange rate in Malaysia that focus on demand for narrow and broad money balances. The objective of this study reveals the existence of a relationship among real money balances, real income, interest rate and exchange rate. The data for Malaysia are used as a case study. The variables used in this study are exchange rate (RM/USD), real income (GDP), and interest rate (T-bill) as independent variables and Narrow money (Ml) and Broad money (M2) as dependent variables. The quarterly period examined is 1994:Q3 — 2006:Q4 (50 observations). These studies use multiple regression models to investigate the relationship between real money balances and their determinants, exchange rate, real income and interest rate. Generally, results from testing the hypothesis of multiple regression models confirm that both money balances (real Ml and M2) have highly significant relationship with their determinants. Despite, interest rate has a significant contributor to narrow money (Ml) but not to broad money (M2). It is shown that the demand for money can be more stable by the inclusion of the exchange rate.
format Student Project
author Abd Muslikh Mashuri, Ervinna Maslina
author_facet Abd Muslikh Mashuri, Ervinna Maslina
author_sort Abd Muslikh Mashuri, Ervinna Maslina
title The relationship of monetary dynamics and exchange rate in Malaysia / Ervinna Maslina Abd Muslikh Mashuri
title_short The relationship of monetary dynamics and exchange rate in Malaysia / Ervinna Maslina Abd Muslikh Mashuri
title_full The relationship of monetary dynamics and exchange rate in Malaysia / Ervinna Maslina Abd Muslikh Mashuri
title_fullStr The relationship of monetary dynamics and exchange rate in Malaysia / Ervinna Maslina Abd Muslikh Mashuri
title_full_unstemmed The relationship of monetary dynamics and exchange rate in Malaysia / Ervinna Maslina Abd Muslikh Mashuri
title_sort relationship of monetary dynamics and exchange rate in malaysia / ervinna maslina abd muslikh mashuri
publishDate 2007
url http://ir.uitm.edu.my/id/eprint/34103/1/34103.pdf
http://ir.uitm.edu.my/id/eprint/34103/
_version_ 1685651148849020928
score 13.211869

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