The relationship between oil prices and exchange rates in South Africa

Nyiko Worship Hlongwane

MPRA Paper from University Library of Munich, Germany

Abstract: The study examines the relationship between oil prices and exchange rates in South Africa for the period from 1970 to 2021. There is a problem of high oil prices and weak exchange rate of the South African Rand to the US Dollar. The study utilised annual time series data collected from the South African Reserve Bank. The study employed an ARDL model and performed Granger Causality test to analyse the relationships between the variables. The study found that there is a negative relationship between oil prices and exchange rates in South Africa. The study further revealed that there is a noncausality between oil prices and exchange rates in South Africa. The study therefore recommends that policies that reduce oil prices must be implemented to safeguard the value of the South African Rand against the US Dollar.

Keywords: Oil prices; exchange rate; ARDL; SARB; South Africa (search for similar items in EconPapers)
JEL-codes: F19 F62 G12 (search for similar items in EconPapers)
Date: 2022-03-20
New Economics Papers: this item is included in nep-ene
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:113209

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