Devaluation of currency in Malaysia boosts trade balance in long run.
The study looked at how the exchange rate affects Malaysia's trade balance from 1955 to 2006. They used different tests to analyze the data. The main findings are: (i) trade balance is linked to exchange rate, domestic income, and foreign income, (ii) devaluing the currency can improve trade balance in the long run, and (iii) there is no J-curve effect in Malaysia.