Malaysia's Economic Stability at Risk Due to Foreign Exchange Rate Depreciation
The article explores how the weakening of Malaysia's foreign exchange rate can affect the country. By analyzing data from 1970 to 2018, including economic and political variables, the study found that political stability plays a crucial role in maintaining a stable exchange rate. Factors like real interest rate, inflation rate, foreign direct investment, export, and financial crisis also impact the exchange rate. The researchers used a method called Autoregressive Distributed Lag to understand the relationship between these variables and the exchange rate. The findings provide valuable insights for investors, governments, policymakers, and researchers to better understand and manage foreign exchange rates.