The Impact of Real Exchange Rate Misalignment on Trade Balance: The Case for Malaysia

Kesan Ketidakseimbangan Kadar Tukaran Wang terhadap Imbangan Perdagangan: Kes di Malaysia

Abstract

From years 1971 to 2018, the change in exchange rate for Ringgit Malaysia (RM) against US Dollar (USD), could be categorized, on average, into four different phases in which it appreciated (from 1971 to 1996), fixed (from 1999 to 2004), strengthen (from 2005 to 2014) and continued to depreciate (from 2015 until 2018). Malaysia recorded a relatively lower balance of trade, and even negative (during years 1981 to 1982 and 1991 to 1997), then increased significantly post 1998. The purpose of this paper is to examine the impact of real exchange rate misalignment on trade balance in Malaysia. The equilibrium real exchange rate and economic models are estimated using the Autoregressive Distributed Lag Approach (ARDL) which can provide some evidence of the asymmetric impact of real exchange rate misalignment on trade balance. Two different models will be evaluated, Model 1 using the real exchange rate while Model 2 utilizing misaligned exchange rate and both results are to be compared.

Di antara tahun 1971 sehingga 2018, kadar pertukaran wang asing bagi Ringgit Malaysia (RM) terhadap Dolar Amerika (USD) telah mengalami secara umumnya, empat fasa berbeza iaitu meningkat (dari tahun 1971 hingga 1996), tetap (dari tahun 1999 hingga 2004), mengukuh (dari tahun 2005 hingga 2014) dan menurun (dari tahun 2015 hingga 2018). Malaysia juga mengalami imbangan perdagangan antarabangsa yang rendah, bahkan negatif (semasa tahun 1981 hingga 1982 dan 1991 hingga 1997), seterusnya meningkat dengan signifikan semenjak selepas 1998. Objektif kajian ini adalah untuk menilai kesan ketidakseimbangan kadar tukaran wang terhadap imbangan perdagangan antarabangsa di Malaysia. Keseimbangan kadar tukaran asing dan model ekonomi diuji menggunakan model Autoregressive Distributed Lag Approach (ARDL) yang mampu memberikan bukti kesan ketidakseimbangan kadar tukaran wang terhadap imbangan perdagangan. Dua model berbeza akan diuji iaitu Model 1 menentukan kadar tukaran wang manakala Model 2 menggunakan kadar tukaran wang yang tidak seimbang dan dapatan dari kedua-dua model adalah dibandingkan.