Preview

A STUDY ABOUT THE EFFECT OF INFLATION, EXCHANGE RATE, INTEREST RATE AND COMMODITY PRICE TOWARDS BALANCE OF PAYMENT IN MALAYSIA

Powerful Essays
Open Document
Open Document
6374 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
A STUDY ABOUT THE EFFECT OF INFLATION, EXCHANGE RATE, INTEREST RATE AND COMMODITY PRICE TOWARDS BALANCE OF PAYMENT IN MALAYSIA
A STUDY ABOUT THE EFFECT OF INFLATION, EXCHANGE RATE, INTEREST RATE AND COMMODITY PRICE TOWARDS BALANCE OF PAYMENT
IN MALAYSIA

AHMAD SUFIAN BIN ABDULLAH
2012422116

BACHELOR OF BUSINESS ADMINISTRATION (HONS)
FINANCE
FACULTY OF BUSINESS MANAGEMENT
UNIVERSITI TEKNOLOGI MARA
MERBOK, KEDAH

MARCH 2014

A STUDY ABOUT THE EFFECT OF INFLATION, EXCHANGE RATE, INTEREST RATE AND COMMODITY PRICE TOWARDS
BALANCE OF PAYMENT
IN MALAYSIA

AHMAD SUFIAN BIN ABDULLAH
2012422116

Submitted in Partial Fulfillment of the Requirement for the
Bachelor of Business Administration (Hons)
Finance

FACULTY OF BUSINESS MANAGEMENT
UNIVERSITI TEKNOLOGI MARA
MERBOK, KEDAH

MARCH 2014

BACHELOR OF BUSINESS ADMINISTRATION (HONS) FINANCE
FACULTY OF BUSINESS MANAGEMENT
UNIVERSITI TEKNOLOGI MARA
MERBOK, KEDAH

“DECLARATION OF ORIGINAL WORK”

I am AHMAD SUFIAN BIN ABDULLAH (I/C No. : 910909 – 02 - 6353) hereby, declare that,

This work has not previously been accepted in substance for any degree, locally or overseas and is not being concurrently submitted for this degree or any other degrees.
This project paper is the result of our independent work and investigation, except where otherwise stated.
All verbatim extracts have been distinguished by quotation marks and sources of our information have been specifically acknowledged.

Signature: _______________ Date: _________________

LETTER OF SUBMISSION
23rd March 2014
The Head of Program, Faculty of Business Management,
University Technology MARA, 08100 MERBOK, KEDAH DARUL AMAN.

Dear Mr. /Mrs.,
SUBMISSION OF PROJECT PAPER
Attached is the project paper titled “A STUDY ABOUT THE EFFECT OF INFLATION, EXCHANGE RATE, INTEREST RATE AND COMMODITY PRICE TOWARDS BALANCE OF PAYMENT IN MALAYSIA” to fulfill the requirement as needed by the Faculty of Business Management, University Technology MARA.
Thank you.
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    Analyse the impact of changes in the global economy on Australia’s Balance of Payments. HSC
    • 780 Words
    • 4 Pages

    Analyse the impact of changes in the global economy on Australia’s Balance of Payments. HSC

    Australia’s Exports (in particular the international competitiveness) affects Australia’s continuous CAD alongside terms of trade, international borrowing, fluctuations in the exchange rate as well as foreign investment. The Balance of Payments is essentially all transactions that Australia has against the worlds trade over a given of time; showing the trade and financial flows in Australia’s Economy. Cyclical and structural factors are the main reasons of this balance position.…

    • 780 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Examining the Implications for an Economy of a Rising Exchange Rate
    • 2852 Words
    • 12 Pages

    Examining the Implications for an Economy of a Rising Exchange Rate

    In order to explore rising exchange rate effects on economy we need to understand essential macroeconomics like Aggregate Supply (AS) and Aggregate Demand (AD).…

    • 2852 Words
    • 12 Pages
    Good Essays
    Read More
  • Good Essays

    Ge Pestel Analysis
    • 703 Words
    • 3 Pages

    Ge Pestel Analysis

    The fluctuation of national growth rate and fuel price is significant. It can be the greatly impact on the firm. Operational cost and labor cost have to be considered. The firm has to avoid both of deflation and inflation of every countries because the difference of economic growth and the external factors which will affect the firm such as the unpredictable situation which come from the fluctuation of currency exchange. The different currency exchange rate has an influence on the firm in order to predict an economic performance. The term of trade to comparing import price and export price also have to be considered in order to know the balancing payments which will be the main factor causing the currency exchange rate issue.…

    • 703 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    Economics Paper Exam Study Paper
    • 878 Words
    • 3 Pages

    Economics Paper Exam Study Paper

    In our paper, we will choose Indian Rupee (INR) as a foreign currency of our choice of discussion. According to the requirement of the topic, first of all, we will try to project the trend of movement of Indian Rupee against US Dollar (US$) for the time period of 2005 – 2010 in figure: 1 below:…

    • 878 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    Purchasing Power Parity
    • 1066 Words
    • 5 Pages

    Purchasing Power Parity

    1.What is the relationship between the exchange rates and relative inflation levels of the two countries? How will this relationship affect Blades’ Thai revenue and costs given that the baht is freely floating? What is the net effect of this relationship on Blades?…

    • 1066 Words
    • 5 Pages
    Good Essays
    Read More
  • Best Essays

    Exchange Rate vs Export Amount
    • 3735 Words
    • 15 Pages

    Exchange Rate vs Export Amount

    The reason that I chose this topic to investigate is I take the course Grade 12 Current Economic Issues Analysis now, and I learn according to the change of the exchange rate of a nation, it will have an influence called export and import effect. But my teacher just mentioned it; he didn’t teach us deeper knowledge of these things. And I have a great interest and curiosity of this topic. Also, I want to attend the economic program in the university. This may help me and related well in my future study.…

    • 3735 Words
    • 15 Pages
    Best Essays
    Read More
  • Better Essays

    Purchasing Power Parity
    • 2605 Words
    • 11 Pages

    Purchasing Power Parity

    There has been a long standing controversy among the economist about the validity of PPP (Purchasing Power Parity) in the long run. The parity reveals that prices in two different economies should be identical to each other when they expressed in terms of the same currency. It is a central building block in the monetary models of exchange rate determination. One of the most common practices, to test the validity of PPP is through unit root test of real exchange rate. In this paper unit root test has been done based on the data on Bangladesh and its major trading partner India, to see whether exchange rate has unit root or not. It has been found out that the PPP holds i.e. real exchange is not trend stationary in the long run, at a certain significance level. So the null hypothesis that real exchange root has unit root has been rejected. This paper should be seen as an exploratory study on this subject.…

    • 2605 Words
    • 11 Pages
    Better Essays
    Read More
  • Good Essays

    Exchange rate system in India
    • 1697 Words
    • 7 Pages

    Exchange rate system in India

    The exchange rate regime in our country has undergone a significant change during 1990s. Until February 1992, exchange rate in India was fixed by the Reserve Bank of India. Thereafter a dual exchange rate system was adopted during March 1992 to February 1993 which also came to an end and a unified market came into being in March 1993. The present exchange rate regime in India is popularly known as managed floating with no fixed target. It is said that because of this regime, India reaps the benefit of flexible exchange rate system on the one hand and less volatility in the foreign exchange market on the other. It has been observed that our economy witnessed nearly a constant exchange rate during March 1993 to August 1995.…

    • 1697 Words
    • 7 Pages
    Good Essays
    Read More
  • Good Essays

    Bop Malaysia
    • 3470 Words
    • 14 Pages

    Bop Malaysia

    This report is focused on the analysis of Malaysia’s balance of payment for last six quarters (from Q3/2011 to Q3/2012). It will show the impact of balance of payment to economy or the financial crisis. The last part of this report will involve the summary and the forecast the Malaysia’s balance of payment in the future.…

    • 3470 Words
    • 14 Pages
    Good Essays
    Read More
  • Best Essays

    Islamic Banking's Role in Controlling Inflation
    • 2780 Words
    • 12 Pages

    Islamic Banking's Role in Controlling Inflation

    Inflation has become a fact of life in nearly all countries, but it is a very serious problem in the developing countries. As far as commercial banking is concerned, it erodes the value of the depositor's savings as well as that of the bank's loans. Yet the banking system does not seem to specifically address this problem. This paper makes an attempt at finding a way of compensating for the loss suffered by capital due to inflation. Identifies the transactions in the commercial banking businesses that are affected by inflation, considers several possible ways of counteracting the adverse effects, and then presents one approach as most suitable for implementation. The method presented here is a general one, universally applicable to all lending-borrowing operations, to neutralize the effect of inflation on such transactions. It is simple and straight forward, but requires the Central Bank to play a pivotal role in its implementation. The method has special relevance to Islamic banking. For whereas in a conventional system the interest paid to the depositor may fully or partially compensate for the loss, and the bank may include it in the interest they charge the borrowers, in an Islamic system the depositor will have to bear the full loss. Therefore a method of compensation for the loss becomes even more urgent.…

    • 2780 Words
    • 12 Pages
    Best Essays
    Read More
  • Good Essays

    Dollarization in Vietnam
    • 1476 Words
    • 6 Pages

    Dollarization in Vietnam

    In Vietnam, according to statistics, the rate of dollarization is always above 20% while this rate in the countries in the region is much lower, such as Indonesia, Thailand and Malaysia… only about 7-10%. The objective of the State Bank of Vietnam in 2010 to reduce this rate to 15%. The phenomenon of D. is…

    • 1476 Words
    • 6 Pages
    Good Essays
    Read More
  • Powerful Essays

    Forecasting Currencies
    • 1508 Words
    • 7 Pages

    Forecasting Currencies

    The following graph shows the historical trend of ask price for the selected currency pair and time period. Note the ask price is selling price of the bank offered. According to the graph, as we can see there is uncommon behaviour between 1st April to 6th April 2013 where the trends are statics at the beginning and start to decline slowly. That’s mean RM value is appreciates. This is because during this period, USD ISM Prices Paid (MAR) priority is medium or it indicates expansion. ISM Manufacturing assesses the state of US industry by surveying executives on expectations for future production, new orders, inventories, employment and deliveries. So, it represents business sentiment regarding future inflation, where a higher figure indicates stronger expectations of inflation. In addition, there is another one of uncommon behaviour on 4th May to 9th May when the trends is increasing at the beginning but start to fall tremendously until 9th May. It is the lowest ask price for this period which is RM 2.9733 to pay for buying 1 USD. The changes was also affected by the events that happen in Malaysia that moment when we has just finished an election season, so the currency get affected at this time as political exposure when the Consumer Price Index tracks changes about +0.15 % in the cost of living. Where prices are increasing rapidly, authorities raise interest rates to increase the cost of borrowing. This lead to a decline in spending and force retailers to lower prices to entice buyers and an interest…

    • 1508 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Good Essays

    Malaysia Financial System
    • 4288 Words
    • 18 Pages

    Malaysia Financial System

    - mobilize members’ resources in the form of members’ provident & pension contributions & insurance premium to the retirement & ins. schemes. schemes.…

    • 4288 Words
    • 18 Pages
    Good Essays
    Read More
  • Powerful Essays

    Autobiography of an Elephant
    • 1246 Words
    • 5 Pages

    Autobiography of an Elephant

    In macroeconomics, inflation is a much known term. Generally, Inflation denotes a sustained increase in the general level of price. During the inflation period the price of goods and services go up and the people will tend to buy less goods and services. Many people think that inflation makes them poorer than before because it raises the cost of what they buy. From the view point of macroeconomics, in Bangladesh the inflation rate is a bit unstable. An overview situation of inflation in Bangladesh over six months in 2007 is discussed in this term paper.…

    • 1246 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Better Essays

    Type of Basic Mechanisms for Exchange Rates
    • 2846 Words
    • 10 Pages

    Type of Basic Mechanisms for Exchange Rates

    Based on the diagram, it is shown that exchange rate appreciates when demand for currency (D1 to D2) increases.…

    • 2846 Words
    • 10 Pages
    Better Essays
    Read More

Related Topics