The Effect of Currency Devaluation on Trade Balance in Malaysia
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Universiti Malaysia Sarawak (UNIMAS)
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This research investigates the effect of currency devaluation on trade balance in Malaysia. The relationship between currency devaluation and trade balance is complex, particularly when considering both short-term and long-term effects. Thus, this research investigates how real exchange rate (RER), domestic income and foreign income affect trade balance. A quantitative secondary data research method will be used for this research, leveraging existing databases and published statistics. The research location of this research is Malaysia and the time period were start from year 1980 until 2023. The data analysis tool used in this research is Vector Error Correction Model (VECM).