Oil price drivers, geopolitical uncertainty and oil exporters’ currencies

Qaisar Akram

No 2019/15, Working Paper from Norges Bank

Abstract: Empirical relationships between crude oil prices and exchange rates of oil exporting countries tend to vary over time. I use econometric models of the norwegian and canadian nominal exchange rates to investigate whether such time-variation could reflect shifts in the key oil price drivers over time. Results suggest that demand- and supply-driven oil price increases strengthen these currencies to different extents. In contrast, heightened geopolitical uncertainty and associated oil price increases go together with a weakening of oil exporters’ currencies. The latter result may explain coincidences of higher oil prices and a weakening of oil exporters’ currencies.

Keywords: Exchange rates; commodity currencies; oil prices; uncertainty (search for similar items in EconPapers)
JEL-codes: C22 C51 F31 F32 Q41 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2019-09-13
New Economics Papers: this item is included in nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://hdl.handle.net/11250/2652837

Related works:
Journal Article: Oil price drivers, geopolitical uncertainty and oil exporters' currencies (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:bno:worpap:2019_15

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