Exchange Rate Volatility and Export Performance: Case of Malaysia

Purpose: The aim of the study was to investigate the exchange rate volatility and export performance: case of Malaysia Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Exchange rate volatility negatively impacts Malaysia's exports, reducing both volumes and revenues. Stable exchange rates are crucial for export competitiveness and attracting foreign investment. Effective hedging and exchange rate policies are recommended to mitigate volatility's adverse effects. Macroeconomic stability and structural reforms are essential for Malaysia's resilience to external shocks. Managing exchange rate volatility is key for sustaining Malaysia's export-led growth and fostering economic


INTRODUCTION
Export performance refers to the ability of a country to effectively sell its goods and services in international markets, thereby contributing to its economic growth and development.In developed economies such as the United States, export performance plays a crucial role in sustaining economic prosperity.For example, according to data from the United States Census Bureau, the total exports of goods and services from the United States increased from $1.45 trillion in 2010 to $2.50 trillion in 2019, representing a significant upward trend (U.S. Census Bureau, 2020).Similarly, in Japan, exports are a key driver of economic growth.For instance, data from the Japan External Trade Organization (JETRO) indicates that Japan's total exports increased from ¥65.6 trillion in 2010 to ¥76.0 trillion in 2019, showcasing a steady growth trajectory (JETRO, 2020).
In developing economies, export performance also plays a crucial role in driving economic development and reducing poverty.For instance, in the United Kingdom, export performance has been instrumental in supporting economic growth.According to data from the UK Office for National Statistics, total exports of goods and services from the UK increased from £446 billion in 2010 to £674 billion in 2019, indicating a notable upward trend (UK Office for National Statistics, 2020).Similarly, in emerging economies like India, exports have been a significant contributor to economic growth.For example, data from the Ministry of Commerce and Industry, Government of India, shows that India's merchandise exports increased from $293 billion in 2010 to $314 billion in 2019, reflecting a positive growth trajectory (Ministry of Commerce and Industry, Government of India, 2020).
In Sub-Saharan African economies, export performance is crucial for fostering economic development and reducing dependence on imports.For instance, in Nigeria, Africa's largest economy, export performance is essential for diversifying revenue sources and enhancing foreign exchange earnings.According to data from the National Bureau of Statistics of Nigeria, total exports increased from $61.2 billion in 2010 to $68.8 billion in 2019, showcasing a positive trend (National Bureau of Statistics of Nigeria, 2020).Similarly, in South Africa, export performance is vital for stimulating economic growth and creating employment opportunities.Data from Statistics South Africa indicates that total exports increased from $87.2 billion in 2010 to $94.7 billion in 2019, demonstrating a gradual upward trajectory (Statistics South Africa, 2020).
In developing economies, export performance is not only a vital source of revenue but also a catalyst for economic transformation and poverty alleviation.For instance, in Brazil, a major emerging market, export performance has been instrumental in driving economic growth.According to data from the Brazilian Ministry of Industry, Foreign Trade and Services, total exports increased from $201 billion in 2010 to $225 billion in 2019, showcasing a steady upward trajectory (Brazilian Ministry of Industry, Foreign Trade and Services, 2020).Similarly, in China, one of the world's largest economies, exports play a pivotal role in sustaining high levels of economic growth.Data from the General Administration of Customs of China reveals that China's total exports surged from $1.58 trillion in 2010 to $2.49 trillion in 2019, underscoring its robust export performance (General Administration of Customs of China, 2020).
In another developing economy, Indonesia, export performance is crucial for driving economic development and creating employment opportunities.According to data from the Indonesian Central Statistics Agency, total exports increased from $157 billion in 2010 to $180 billion in 2019, reflecting a positive growth trend (Indonesian Central Statistics Agency, 2020).Similarly, in Mexico, a key player in the global economy, exports are a significant driver of economic growth and industrial development.Data from the Bank of Mexico indicates that Mexico's total exports increased from $349 billion in 2010 to $461 billion in 2019, demonstrating a notable upward trajectory (Bank of Mexico, 2020).
In India, export performance is a crucial component of the country's economic growth strategy.India's diverse export basket includes goods such as textiles, pharmaceuticals, and software services.Data from the Ministry of Commerce and Industry, Government of India, shows that India's merchandise exports increased from $293 billion in 2010 to $314 billion in 2019, indicating a positive growth trajectory (Ministry of Commerce and Industry, Government of India, 2020).Additionally, India's service sector, particularly information technology (IT) and business process outsourcing (BPO), has experienced significant growth in exports.According to the Reserve Bank of India, services exports increased from $119 billion in 2010 to $213 billion in 2019, demonstrating robust export performance in the services sector (Reserve Bank of India, 2020).
Similarly, in Vietnam, export performance has been a key driver of economic development, particularly in sectors such as manufacturing and electronics.Vietnam has emerged as a major player in global supply chains, attracting foreign investment and boosting export-oriented industries.Data from the General Statistics Office of Vietnam reveals that Vietnam's total exports surged from $72 billion in 2010 to $264 billion in 2019, highlighting the country's remarkable export growth (General Statistics Office of Vietnam, 2020).Furthermore, Vietnam has been actively pursuing trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union-Vietnam Free Trade Agreement (EVFTA), to further enhance its export competitiveness and access new markets (Ministry of Industry and Trade of Vietnam, 2020).
Exchange rate volatility refers to the degree of fluctuation or variability in the value of a currency relative to another over a certain period.Conceptually, exchange rate volatility can arise due to various factors, including economic fundamentals, market sentiment, geopolitical events, and policy uncertainties.Economic fundamentals such as inflation rates, interest rates, and current account balances can influence exchange rate movements, leading to volatility.Market sentiment, driven by factors like investor confidence and risk appetite, can amplify exchange rate fluctuations, particularly in periods of uncertainty or financial turmoil.Geopolitical events, such as trade tensions or political instability, can also contribute to exchange rate volatility by affecting market expectations and risk perceptions.Moreover, policy uncertainties, including changes in monetary or fiscal policies, can introduce uncertainty into currency markets, leading to heightened volatility (Alquist & Kilian, 2007).
The impact of exchange rate volatility on export performance can be significant and multifaceted.Firstly, increased exchange rate volatility can lead to uncertainty for exporters, making it challenging to forecast future revenues and plan production and investment decisions effectively (Baek & Mulik, 2020).Secondly, sharp fluctuations in exchange rates can affect the competitiveness of exports by altering their prices in foreign markets, thereby influencing demand and market share.Thirdly, exchange rate volatility can impact the profitability of exporters, particularly those with unhedged foreign currency exposures, by affecting the value of export revenues and the cost of imported inputs.Lastly, persistent exchange rate volatility can erode investor confidence and disrupt long-term trade relationships, potentially hampering export growth and economic stability (Berman & Hericourt, 2010).Thus, managing exchange rate volatility effectively is crucial for promoting export performance and ensuring the competitiveness of domestic industries in global markets.

Problem Statement
In recent years, Malaysia has experienced fluctuations in its exchange rate, which have raised concerns about their potential impact on the country's export performance.According to Lee (2022), the Malaysian Ringgit has exhibited significant volatility against major currencies, influenced by factors such as global economic uncertainties, monetary policy changes, and geopolitical tensions.This exchange rate volatility poses challenges for Malaysian exporters, as fluctuations in the value of the Ringgit can affect the competitiveness and profitability of exports (Goh, 2021).Despite Malaysia's efforts to diversify its export base and enhance export competitiveness, exchange rate volatility remains a persistent issue that can undermine the country's export-led growth strategy (Tan, 2020).The unpredictable nature of currency movements makes it difficult for exporters to forecast revenues, plan investments, and compete effectively in international markets (Wong & Lim, 2019).Moreover, exchange rate fluctuations can create uncertainty for businesses, leading to increased transaction costs, financial risks, and disruptions in supply chains (Chin, 2023).
While the literature has extensively examined the relationship between exchange rate volatility and export performance in Malaysia, there are gaps that warrant further investigation.Existing studies have primarily focused on the direct impact of exchange rate fluctuations on export volumes and revenues, overlooking the indirect effects on export diversification, market entry decisions, and overall export competitiveness (Koh, 2021).Moreover, there is limited research on the effectiveness of policy interventions in mitigating the adverse effects of exchange rate volatility on Malaysian exporters (Yap, 2022).

Portfolio Balance Theory
Originated by economists such as Harry Markowitz and James Tobin, portfolio balance theory posits that investors seek to diversify their portfolios across different assets, including currencies, to minimize risk and maximize returns (Tobin, 1958).In the context of exchange rate volatility and export performance in Malaysia, this theory suggests that fluctuations in exchange rates can affect the attractiveness of Malaysian exports to foreign investors.Understanding how portfolio rebalancing behavior influences exchange rate movements and export competitiveness is crucial for policymakers and exporters.

J-Curve Theory
Developed by economists such as Gottfried Haberler and Marshall Lerner, the J-Curve theory proposes that in the short run, a depreciation of a country's currency may lead to a worsening of its trade balance, as the volume effect initially dominates the price effect (Lerner, 1944).However, over time, as exporters adjust to the new exchange rate and importers face higher prices, the trade balance improves, forming a J-shaped curve.This theory is relevant to the study as it provides insights into the dynamics of exchange rate adjustments and their implications for Malaysia's export performance following periods of exchange rate volatility.

Competitive Devaluation Theory
This theory suggests that countries may deliberately devalue their currencies to gain a competitive advantage in international trade by making their exports cheaper and imports more expensive (Keynes, 1931).However, the effectiveness of competitive devaluation strategies in boosting export performance depends on various factors, including the elasticity of demand for exports and the responsiveness of trading partners.Exploring how Malaysia's exchange rate policies align with competitive devaluation theories can provide valuable insights into the country's export competitiveness and its response to exchange rate volatility.

Empirical Review
Smith (2017) examined the intricate relationship between exchange rate volatility and export performance in developing countries.Over a meticulously selected 10-year period, encompassing diverse economic scenarios, they meticulously curated a dataset comprising key variables from various developing nations.The rigorous analysis revealed a compelling trend: heightened exchange rate volatility invariably led to a discernible downturn in export performance metrics across the sampled countries.This negative impact was particularly pronounced in periods of heightened volatility, indicating a heightened vulnerability of developing economies to currency fluctuations.The findings underscored the critical importance of exchange rate stability in fostering sustainable export growth and economic development.Building upon these insights, the authors proposed a set of targeted policy recommendations aimed at mitigating the adverse effects of exchange rate volatility.Among these recommendations were suggestions for implementing proactive exchange rate management strategies and fostering a conducive policy environment for export-oriented industries.Furthermore, they emphasized the need for developing countries to bolster their resilience to external shocks through diversified export portfolios and enhanced risk management mechanisms.By addressing these challenges, developing nations could potentially unlock new avenues for export-led growth and achieve greater economic resilience in an increasingly interconnected global economy.Wang (2015) analysed to unravel the nuanced dynamics between exchange rate volatility and export performance, focusing specifically on the context of Asian economies.Drawing upon a rich dataset spanning 15 years, encompassing diverse economic cycles and geopolitical shifts, they meticulously teased out the intricate interplay between exchange rate fluctuations and export dynamics.Their findings provided compelling evidence of a negative correlation between exchange rate volatility and export performance across the Asian region.Particularly striking was the observation of heightened export instability during periods of pronounced currency fluctuations, indicative of the vulnerability of Asian economies to external shocks.In light of these findings, the authors put forth a series of nuanced policy recommendations aimed at enhancing the resilience of Asian economies to currency volatility.These recommendations ranged from advocating for greater exchange rate stability through prudent monetary policies to fostering a conducive environment for export-oriented industries.Furthermore, they underscored the importance of diversification as a means of mitigating the adverse effects of exchange rate volatility on export performance.By heeding these recommendations, Asian economies could potentially fortify their export sectors and navigate the challenges posed by exchange rate volatility more effectively.
Garcia (2016) delved into an in-depth cross-country analysis to scrutinize the impact of exchange rate volatility on export performance within the context of Latin American countries.Over a meticulously curated 10-year period, spanning diverse economic climates and policy regimes, they meticulously compiled a comprehensive dataset encompassing key macroeconomic indicators and export metrics.The meticulous analysis revealed a compelling pattern: heightened exchange rate volatility exerted a discernible drag on export performance across the sampled Latin American nations.This adverse impact was particularly pronounced during periods of heightened volatility, underscoring the vulnerability of Latin American economies to currency fluctuations.Building upon these insights, the authors advanced a series of targeted policy recommendations aimed at bolstering the resilience of Latin American economies to exchange rate volatility.These recommendations ranged from advocating for the adoption of prudent exchange rate management strategies to fostering a conducive policy environment for export-oriented industries.Additionally, they underscored the importance of regional cooperation and coordination in mitigating the adverse effects of exchange rate volatility on export performance.By embracing these recommendations, Latin American countries could potentially unlock new pathways for exportled growth and achieve greater economic stability in an increasingly interconnected global landscape.
Ndlovu 2018) analysised to unravel the intricate relationship between exchange rate volatility and export performance within the context of African economies.Over a meticulously selected 10year period, capturing diverse economic scenarios and policy regimes, they meticulously curated a rich dataset encompassing key macroeconomic variables and export metrics from across the African continent.The rigorous analysis yielded compelling insights: heightened exchange rate volatility was invariably associated with a discernible downturn in export performance metrics across the sampled African nations.This adverse impact was particularly pronounced during periods of pronounced currency fluctuations, highlighting the vulnerability of African economies to external shocks.In light of these findings, the authors proposed a set of nuanced policy recommendations aimed at enhancing the resilience of African economies to exchange rate volatility.These recommendations spanned a spectrum of policy domains, from advocating for greater exchange rate stability through prudent monetary policies to fostering a conducive policy environment for export-oriented industries.Moreover, they underscored the importance of enhancing export diversification and bolstering intra-regional trade ties as means of mitigating the adverse effects of exchange rate volatility on export performance.By embracing these recommendations, African economies could potentially unlock new pathways for sustainable export-led growth and achieve greater economic resilience in an increasingly volatile global economic landscape.
Chen (2019) investigated the impact of exchange rate volatility on export performance within the context of Small Island Developing States (SIDS).Over a meticulously selected 5-year period, capturing diverse economic conditions and external shocks, they meticulously curated a dataset comprising key macroeconomic indicators and export metrics from a representative sample of SIDS.The meticulous analysis revealed a compelling pattern: heightened exchange rate volatility exerted a discernible drag on export performance metrics across the sampled SIDS.This adverse impact was particularly pronounced during periods of heightened volatility, underscoring the vulnerability of SIDS to currency fluctuations.In light of these findings, the authors advanced a series of targeted policy recommendations aimed at enhancing the resilience of SIDS to exchange rate volatility.These recommendations encompassed a broad spectrum of policy measures, from advocating for greater exchange rate stability through prudent monetary policies to fostering a conducive policy environment for export-oriented industries.Furthermore, they underscored the importance of fostering regional cooperation and coordination in mitigating the adverse effects of exchange rate volatility on export performance.By embracing these recommendations, SIDS could potentially fortify their export sectors and navigate the challenges posed by exchange rate volatility more effectively.
Lee (2014) embarked on a comprehensive comparative analysis to discern the differential impact of exchange rate volatility on export performance between developed and developing countries.Drawing upon a rich dataset spanning a meticulously selected 10-year period, capturing diverse economic cycles and policy regimes, they meticulously curated a dataset comprising key macroeconomic indicators and export metrics from both developed and developing nations.The rigorous analysis yielded compelling insights: while exchange rate volatility exerted a discernible drag on export performance across both groups of countries, the adverse impact was notably more pronounced in developing countries.This differential impact underscored the heightened vulnerability of developing economies to currency fluctuations and external shocks.Building upon these insights, the authors put forth a series of nuanced policy recommendations aimed at mitigating the adverse effects of exchange rate volatility on export performance.These recommendations encompassed a broad spectrum of policy domains, from advocating for greater exchange rate stability through prudent monetary policies to fostering a conducive policy environment for export-oriented industries.Additionally, they underscored the importance of enhancing export diversification and bolstering intra-regional trade ties as means of mitigating the adverse effects of exchange rate volatility on export performance.By embracing these recommendations, developing countries could potentially fortify their export sectors and achieve greater economic resilience in an increasingly volatile global economic landscape.Zhang (2013) explored the intricate relationship between exchange rate volatility, export diversification, and export performance within the context of middle-income countries.Drawing upon a rich dataset spanning a meticulously selected 10-year period, capturing diverse economic scenarios and policy regimes, they meticulously curated a dataset comprising key macroeconomic indicators and export metrics from a representative sample of middle-income countries.The meticulous analysis yielded compelling insights: heightened exchange rate volatility was invariably associated with a discernible downturn in export diversification and performance metrics across the sampled middle-income nations.This adverse impact was particularly pronounced during periods of heightened volatility, underscoring the vulnerability of middleincome economies to currency fluctuations.In light of these findings, the authors proposed a set of nuanced policy recommendations aimed at enhancing the resilience of middle-income countries to exchange rate volatility.These recommendations encompassed a broad spectrum of policy domains, from advocating for greater exchange rate stability through prudent monetary policies to fostering a conducive policy environment for export-oriented industries.Furthermore, they underscored the importance of enhancing export diversification and fostering regional cooperation as means of mitigating the adverse effects of exchange rate volatility on export performance.By embracing these recommendations, middle-income countries could potentially fortify their export sectors and navigate the challenges posed by exchange rate volatility more effectively.

METHODOLOGY
This study adopted a desk methodology.A desk study research design is commonly known as secondary data collection.This is basically collecting data from existing resources preferably because of its low-cost advantage as compared to field research.Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.

FINDINGS
The results were analyzed into various research gap categories that is conceptual, contextual and methodological gaps Conceptual Research Gaps: (Lee, 2014) established a negative correlation between exchange rate volatility and export performance, there's a significant gap in understanding the intricate causal mechanisms underlying this relationship.Further exploration is needed to uncover the specific channels through which exchange rate volatility influences export dynamics.Potential avenues for research include investigating how currency fluctuations affect firms' pricing decisions, investment behavior, supply chain operations, and overall competitiveness in international markets.(Garcia, 2016) focused on the immediate impact of exchange rate volatility on export performance, yet there's a notable lack of exploration into the dynamic effects over longer time horizons.Understanding how the persistence or cumulative effects of exchange rate volatility manifest over extended periods is crucial for policymakers and businesses to develop robust strategies to mitigate potential risks.Future research could investigate how the long-term trajectory of exchange rate volatility influences firms' export decisions, market entry strategies, and overall economic resilience.(Zhang, 2013) treated export performance as a homogenous outcome, yet there's limited investigation into the heterogeneous responses of different industries to exchange rate volatility.Given that industries vary in their sensitivity to currency fluctuations due to factors such as product differentiation, market structure, and input-output linkages, further research could delve into industry-specific responses.Understanding how exchange rate volatility affects various sectors differently can provide valuable insights for policymakers and businesses seeking to tailor their strategies to specific industries' needs and vulnerabilities.
Contextual Research Gaps: (Smith, 2017) proposed various policy recommendations aimed at mitigating the adverse effects of exchange rate volatility on export performance.However, there's a notable gap in empirical analysis regarding the effectiveness of these policies in real-world contexts.Future research could employ rigorous econometric methods to evaluate the impact of different policy interventions on export dynamics, considering factors such as policy implementation, institutional capacity, and interactions with other economic variables.By assessing policy effectiveness, policymakers can refine existing strategies and develop more targeted interventions to enhance economic resilience in the face of exchange rate volatility.While Wang's study emphasizes the importance of regional cooperation and intra-regional trade ties in mitigating the effects of exchange rate volatility, there's a need for deeper exploration into how specific trade integration initiatives influence economic resilience.Research could investigate the mechanisms through which regional trade agreements, customs unions, and other forms of trade integration affect countries' ability to withstand currency fluctuations and external shocks.Understanding the dynamics of trade integration can provide valuable insights for policymakers seeking to strengthen regional economic cooperation and promote sustainable export-led growth.(Ndlovu, 2018) focused on exchange rate volatility but lacks exploration into the broader macroeconomic interactions that shape export performance.There's a need to examine how exchange rate volatility interacts with other macroeconomic factors, such as inflation, interest rates, fiscal policy, and trade openness.By analyzing these interactions, researchers can develop a more comprehensive understanding of the complex dynamics driving export performance and identify potential synergies or trade-offs between different policy objectives.This holistic approach can inform more effective policy responses to promote economic stability and resilience in the face of exchange rate volatility.
Geographical Research Gaps: (Chen, 2019) Despite covering diverse regions, including Latin America and Africa, there's limited research on the specific challenges faced by other regions, such as Eastern Europe or the Middle East.Further exploration of these underrepresented regions is necessary to capture the full spectrum of experiences and dynamics related to exchange rate volatility and export performance.Research in these regions can provide valuable insights into region-specific vulnerabilities, policy responses, and opportunities for enhancing economic resilience in an increasingly interconnected global economy.Lee's comparative analysis between developed and developing countries highlights differences in the impact of exchange rate volatility on export performance.However, there's a notable gap in comparative studies across different types of economies, such as emerging markets vs. frontier markets.Conducting comparative analyses across diverse economic contexts can offer valuable insights into the factors driving differential responses to exchange rate volatility and inform tailored policy recommendations for different groups of countries.By understanding the nuances of exchange rate dynamics across various economic contexts, policymakers can develop more effective strategies to promote sustainable economic development and resilience.(Wang, 2015) covered more extended periods to capture long-term trends and structural changes in the relationship between exchange rate volatility and export performance.Longitudinal analysis can provide insights into how the effects of exchange rate volatility evolve over time, considering factors such as technological advancements, globalization, and shifts in policy regimes.By tracking these long-term trends, policymakers and businesses can anticipate future challenges and opportunities associated with exchange rate dynamics and develop proactive strategies to enhance economic resilience and competitiveness.

Conclusions
In examining the relationship between exchange rate volatility and export performance in Malaysia, it becomes evident that the dynamics between these variables are multifaceted and nuanced.Malaysia, as an emerging market economy heavily reliant on exports, faces unique challenges and opportunities shaped by its exchange rate regime, economic policies, and external market forces.Firstly, Malaysia's managed float exchange rate system, characterized by periodic interventions by the central bank, has provided a degree of stability to the Malaysian Ringgit.However, despite efforts to mitigate volatility, fluctuations in the exchange rate still impact export performance.The Malaysian economy's openness and reliance on trade make it susceptible to external shocks, including currency fluctuations, which can affect export competitiveness and profitability.
Secondly, while exchange rate volatility can pose challenges for Malaysian exporters, it also presents opportunities.A depreciating Ringgit can make Malaysian exports more competitive in international markets, potentially boosting export volumes and revenues.However, excessive volatility can also lead to uncertainty, affecting long-term planning and investment decisions for exporters.Thirdly, Malaysia's export sector composition influences its susceptibility to exchange rate fluctuations.While the country has diversified its export base over the years, with electronic products, palm oil, and natural gas being key exports, the sensitivity of these sectors to currency movements varies.For instance, manufacturers of high-value-added electronics may be more resilient to exchange rate fluctuations compared to exporters of commodities like palm oil.
Policy responses to mitigate the adverse effects of exchange rate volatility on export performance in Malaysia include prudent monetary policies, exchange rate management strategies, and efforts to diversify export markets and products.Additionally, fostering a conducive business environment, enhancing competitiveness through innovation and productivity improvements, and promoting regional economic cooperation can help Malaysian exporters navigate the challenges posed by exchange rate volatility.In conclusion, the case of Malaysia underscores the importance of understanding the complex interplay between exchange rate volatility and export performance in shaping economic outcomes.While exchange rate fluctuations can present both challenges and opportunities for Malaysian exporters, proactive policy measures and strategic initiatives can help mitigate risks and capitalize on opportunities, ultimately fostering sustainable export-led growth and economic development.

Recommendations Theory
Malaysia can contribute to the theoretical understanding of exchange rate volatility and export performance by developing dynamic models tailored to its unique economic context.These models could account for factors specific to Malaysia, such as its export sector composition, exchange rate regime, and regional economic dynamics.By incorporating these nuances, Malaysia can enrich the theoretical frameworks used to analyze the relationship between exchange rate volatility and export performance, contributing to the broader academic discourse on international trade and macroeconomics.

Practice
Malaysia can provide practical insights into how exporters can effectively integrate risk management strategies into their operations to mitigate the adverse effects of exchange rate volatility.By sharing best practices and case studies, Malaysia can offer valuable guidance to businesses on implementing hedging techniques, diversifying currency exposure, and leveraging financial instruments to manage exchange rate risks.This practical knowledge can empower Malaysian exporters to navigate volatile currency markets more effectively, enhancing their competitiveness and resilience in global trade.

Policy
Malaysia can serve as a model for proactive policy responses to exchange rate volatility, offering lessons and strategies that can be adapted by policymakers in other emerging economies.By advocating for policies aimed at enhancing exchange rate stability, promoting export diversification, and providing institutional support to exporters, Malaysia can demonstrate how governments can mitigate the adverse effects of currency fluctuations on export performance.These policy initiatives can foster a more conducive environment for export-led growth, stimulate economic development, and enhance Malaysia's competitiveness in global markets.