The effects of real exchange rate on the demand for Malaysian exports of primary commodities

The empirical evidence from this study suggests that the real exchange rate could only significantly influence the foreign export demand for petroleum and rubber; it could not influence sawlog, sawn timber, palm oil and tin. But the study also found that the elasticity of demand for these major primary commodities exports are unelastic with respect to their own prices and real exchange rate. These results cost doubt on whether the recent depreciation of ringgit has any significant positive influence toward the improvement in the trade balance of Malaysia