Were Foreign Exchange Markets Reacting Negatively to Political Events? The Case of Malaysia

IF 0.6 Q4 ECONOMICS South Asian Journal of Macroeconomics and Public Finance Pub Date : 2021-04-01 DOI:10.1177/2277978721995649

Hon-Chung Hui

引用次数: 0

Abstract

This article explores the effects of political events on foreign exchange returns in Malaysia. We identify five political events in recent history, namely the 13th General Election (GE13), the imprisonment of a key opposition politician, the scandal from the 1MDB exposé, the appointment of a new Central Bank Governor and the 14th General Election (GE14). Using event studies, our findings show that the imprisonment of the opposition party leader triggered a favourable response from the foreign exchange market. However, market reactions to the 1MDB scandal were largely unfavourable. The GE13 triggered unfavourable market response, while the reverse is true for market reactions to GE14. Market response to the appointment of the new Central Bank Governor was rather positive. The Event Study is the first of its kind that examines the foreign exchange market implications of key political events in Malaysia. There are practical considerations that emanate from these findings. JEL Classification: F31, D72, D73, O38

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外汇市场对政治事件反应消极吗?马来西亚案例

本文探讨了政治事件对马来西亚外汇收益的影响。我们确定了近代史上的五个政治事件，即第13次大选（GE13）、一名主要反对派政治家被监禁、1MDB曝光的丑闻、任命新的中央银行行长和第14次大选（GE 14）。通过事件研究，我们的研究结果表明，反对党领袖被监禁引发了外汇市场的积极反应。然而，市场对1MDB丑闻的反应在很大程度上是不利的。GE13引发了不利的市场反应，而市场对GE14的反应正好相反。市场对新任央行行长的任命反应相当积极。事件研究是第一个研究马来西亚主要政治事件对外汇市场影响的研究。这些发现产生了一些实际的考虑。JEL分类：F31、D72、D73、O38

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来源期刊

South Asian Journal of Macroeconomics and Public Finance ECONOMICS-

CiteScore

2.10

自引率

11.10%

发文量

期刊介绍： The purpose of the Journal is to publish (in English language) peer-reviewed articles, reviews and scholarly comments on issues relating to contemporary global macroeconomics and public finance by which is understood: The Journal is for all professionals concerned with contemporary Macroeconomics and Public Finance and is a forum for all views on related subjects. The Editorial Board welcomes articles of current interest on research and application on the areas mentioned above. The Journal will be international in the sense that it seeks research papers from authors with an international reputation and articles that are of interest to an international audience. In pursuit of the above, the journal shall: a. draw on and include high quality work from the international community of scholars including those in the major countries of Asia, Europe, Asia Pacific, the United States, other parts of the Americas and elsewhere with due representation for considerations of the readership. The Journal shall include work representing the major areas of interest in contemporary research on Macroeconomics and Public Finance and on a wide range of issues covering macro- economics, tax and fiscal issues, banking and finance, international trade, labour economics, computational and mathematical methods, etc. The Journal would particularly engage papers on pure and applied economic theory and econometric methods. b. avoid bias in favour of the interests of particular schools or directions of research or particular political or narrow disciplinary objectives to the exclusion of others. c. ensure that articles are written in a terminology and style which makes them intelligible, not merely within the context of a particular discipline or abstract mode, but across the domain of relevant disciplines.