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What Do Foreign Exchange Markets Say About Election Outcomes? A Comparison Between Malaysia, Singapore and Philippines


  • Hui, Hon Chung


In this paper, Event Studies are conducted to examine the effects of political events on foreign exchange returns in Malaysia, Singapore and Philippines. The political events of interest in this paper cover the general elections in all three countries. Some of the salient findings are as follows. First, the 13th General Election in Malaysia led to a mostly negative response from the foreign exchange market, with a sharper than expected Ringgit depreciation. Second, the 14th Malaysian General Election elicited a rather positive reaction from the foreign exchange market – there was far less depreciation of the Ringgit than what was previously believed. Third, both the 2011 and 2015 General Elections in Singapore were followed by positive reactions from the market. Fourth, presidential elections in the Philippines produced contrasting results – the election of Benigno Aquino III was greeted with optimism, whereas his successor, Rodrigo Duterte received a less welcoming reception from the foreign exchange market, with the Philippine Peso depreciating more than the predicted amount in the market model.

Suggested Citation

  • Hui, Hon Chung, 2019. "What Do Foreign Exchange Markets Say About Election Outcomes? A Comparison Between Malaysia, Singapore and Philippines," MPRA Paper 98148, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:98148

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    More about this item


    general election; event studies; exchange rate; confidence;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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