It is generally accepted that the government plays a major role in promoting and/or financing private capital formation. Policymakers and analysts believe that public investment provides a significant stimulus to private investment, and thus serves as an instrument in achieving a high economic...

: This paper investigates the importance of external factors in the domestic interest rate determination of Malaysia and measures the Malaysian financial market openness and domestic speed of adjustment to changes in foreign factors by capturing the effects of the Asian Financial Crisis in 1997....