Talk on exchange rate risks

Universiti Putra Malaysia (UPM) Faculty of Economics and Management Senior Professor, Prof Dr Mohamed Ariff Syed Mohamed visited UTAR Faculty of Business and Finance (FBF) on 29 July 2015 and gave a public talk on exchange rate risks.

Prof Ariff, who is also the external examiner for the Bachelor of Finance (Hons) programme, was accompanied by his PhD student Alireza Zarei.

The talk commenced with a discussion on the trend of the Malaysian Ringgit. “Based on historical trends, the Ringgit outlook was not optimistic especially between the years 1973 and 2014. The ringgit has depreciated by 35% vis-à-vis the US Dollar, 99% against the Singapore Dollar, and 120% against the Japanese Yen. Even within the last six months, the Ringgit has lost ground by 8% and 5% against the US dollar and Singapore dollar respectively,” said Prof Ariff.

Questions were raised and views were exchanged before the presentation moved on to the lessons from advanced countries with respect to the determination of exchange rates.

Drawing on the experiences of four selected advanced countries with free floating exchange rates over a span of 55 years, Prof Ariff highlighted the fact that the long run inflation and interest rate differentials remain the important fundamentals in governing exchange rates behavior.

Alireza then explained how panel econometrics can be useful in the investigation of exchange rates behavior. A quick take-away from his elaborated explanation was that a solid research always comes along with hard work.

Both Prof Ariff and Alireza presented their findings and shared their knowledge with the audience who took great interest especially in the light of the current economic and financial situation faced by several countries.

Members of the audience at the talk

Prof Ariff (left) and Alireza (right) presenting their findings

FBF Dean Prof Choong Chee Keong presenting a token of appreciation to Prof Ariff

Group photo of the speakers and audience