Investigation Of The Impact Of Exchange Rates, Interest Rates, Economic Growth, And Circulation Of Electronic Money On Inflation In Malaysia

English

Abstract

This project intends to research the effects of the USD vs Malaysian Ringgit exchange rate, Malaysia's central bank interest rate, The growth of the economic in malaysia, the circulation for electronic money in Malaysia on inflation in Malaysia. Bank Negara Malaysia is a secondary data source for this investigation, global financial institution (IMF), also the World Bank with a monthly research period from January 2012 to January 2020. We use Model for Error Correction (ECM) model for the investigate some influence relationship at the long and short run.We found that a stronger USD further depresses the Malaysian ringgit and has an impact on increasing Malaysia’s inflation on the long and short run. When the Malaysian central bank interest rate are higher, the more it will push Malaysia’s inflation. And the higher economic growth in Malaysia, the more accelerating inflation at Malaysia, at long and the short run. However, some circulation of electronic money in Malaysia only has a short-term impact on inflation and in the long term the impact is not significant.