ISSN: 2222-6990
Open access
Currency devaluation refers to a deliberate and official reduction in the value of a country's currency in relation to other currencies. It can occur through various mechanisms, such as adjusting interest rates, intervening in foreign exchange markets, or implementing monetary policies aimed at reducing the supply of domestic currency. Currency devaluation can create financial challenges for business. Financial institutions may be more cautious in extending credit due to increased risks associated with exchange rate fluctuations. Devaluation reduces the value of collateral assets, making it harder for entrepreneurs to secure financing. The systematic literature review (SLR) method was employed in this paper. The authors have covered 6 years of research articles published between 2019 and 2024. This study used thematic analysis for analyzing the data and synthesis the findings. Increased import costs, inflationary pressures, and reduced purchasing power have placed significant strain on Muslim entrepreneurs in Malaysia. By recognizing these challenges, Muslim entrepreneurs can develop effective financial management strategies and explore hedging mechanisms to mitigate currency risk. The study recommended that Muslim entrepreneurs in Malaysia should consider developing export-oriented strategies, including identifying new export markets, conducting market research, and adapting their products and services to meet international demand. By capitalizing on export opportunities, Muslim entrepreneurs can diversify their revenue and reduce their vulnerability to the domestic economic challenges caused by currency devaluation.
Abdullah, A. Z., & Ibrahim, M. (2023). Economic challenges for Muslim SMEs in Malaysia: An empirical analysis. Malaysian Journal of Economic Studies.
Ahmad, S. Z., & Ahmad, N. (2021). The impact of currency fluctuations on SMEs’ performance in emerging markets. Journal of Economic Studies.
Aroghene, K. and AkpobomeAkpoyibo, G. (2023). Naira swap objectives and impact on the performance of small and medium scale enterprise SMEs. International Journal of Management & Entrepreneurship Research, 5(4), 233-243.
Felix, N. (2022). Empirical Analysis of The Effect of Currency Devaluation on The Manufacturing Sector’s Performance in Nigeria.
Borensztein, E., & De Gregorio, J. (1999). Devaluation and inflation after currency crises. International Monetary Fund, 1-34.
Bussiere, M., Saxena, S., & Tovar, C. (2012). Chronicle of currency collapses: re-examining the effects on output. Journal of International Money and Finance, 31(4), 680-708.
Fadli, K. (2011). Peranan pendakwah dalam pembangunan ekonomi masyarakat Medan Indonesia (Doctoral dissertation, University of Malaya).
Fleming, J. M. (1958). Exchange Depreciation, Financial Policy, and the Domestic Price Level. Staff Papers-International Monetary Fund, 6(2), 289-322.
Karim, N. A., & Shaari, R. (2020). The impact of exchange rate volatility on SME performance in Malaysia. Journal of International Business and Economics.
Khan, T., Khan, A., Wei, L., Ayub, S., Wang, J., & Zia, J. (2022). Impact of currency devaluation on economic growth: evidence from Pakistan. Journal of Marketing Strategies, 4(2), 327-352.
Latif, R., & Fauzi, N. (2022). Economic challenges and strategies for Malaysian SMEs: The influence of currency devaluation. Asian Business Review.
Lavalliere, H. K., Molina, F. T., & Chaudhary, S. M. (2023). Effect of Currency Devaluation on Performance of Small and Medium Firms in Beirut, Lebanon. Journal of Economics, 7(1), 12–21.
Mohamad, M. H., & Hassan, A. (2023). Currency devaluation and its effects on SME growth: Insights from Malaysian entrepreneurs. Global Journal of Business Research.
Mokhber, M., Gi, T., Rasid, S., Vakilbashi, A., Zamil, N., & Seng, Y. (2017). Succession planning and family business performance in SMEs. The Journal of Management Development, 36(3), 330-347.
Muarief, F., Herawati, H., Suroso, A., Iswahyuningsih, I., & Wardani, D. R. K. (2024). Analysis of The Relationship Between Labor Market, Currency Exchange Rate Stability, Product Quality and International Trade Competitiveness. Innovative: Journal Of Social Science Research, 4(3), 6504-6512.
Nor, M. R., & Salleh, F. (2019). Muslim SMEs in Malaysia: Adapting to economic changes. Journal of Islamic Business and Finance.
Othman, R., & Hamid, M. (2021). The role of government policies in supporting SMEs during economic instability: A Malaysian perspective. Journal of Economic Policy.
Rahman, M., & Ismail, R. (2022). Currency devaluation and SME performance: Evidence from Southeast Asia. Asian Economic and Financial Review.
Salleh, M. S., & Hassan, H. (2020). Muslim entrepreneurship: Challenges and prospects in the context of economic fluctuations. Journal of Business and Management.
Sana, A. K., Poddar, S., & Paul, B. (2020). Contribution of small and medium enterprises (SMES) towards Malaysian economic growth: an empirical study. International Journal on Recent Trends in Business and Tourism (IJRTBT), 4(2), 18-27.
Shahbaz, M., Islam, F., & Aamir, N. (2011). Is devaluation contractionary? empirical evidence for Pakistan. Economic Change and Restructuring, 45(4), 299-316.
Yusoff, N., & Ali, M. (2019). SME resilience during economic downturns: The case of Malaysia. International Journal of Entrepreneurship.
Ahmad, H. H., Zain, N. A. B. M., & Shaari, M. S. M. (2024). Currency Devaluation and Business Performance: The Case of Muslim Entrepreneurship in SMEs Malaysia. International Journal of Academic Research in Business and Social Sciences, 14(9), 1931–1942.
Copyright: © 2024 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode