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How do energy price hikes affect exchange rates during the war in Ukraine?

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Listed:
  • Amin Sokhanvar

    (Ural Federal University)

  • Chien-Chiang Lee

    (Nanchang University)

Abstract

The Russia–Ukraine war and new sanctions against Russia have created economic losers and winners. Supply chain shocks are made by two factors: the market’s extraordinary swings and the breadth of commodities exported by Russia and Ukraine including energy and raw material. This paper adopts the cross-quantilogram approach to visualize the effects of energy price shocks on the exchange rate movements during this war. Our findings indicate that energy price hikes are associated with the appreciation of the Canadian dollar against the Euro and Japanese yen. Considering the ongoing war in Ukraine, the best feasible policy responses are discussed.

Suggested Citation

  • Amin Sokhanvar & Chien-Chiang Lee, 2023. "How do energy price hikes affect exchange rates during the war in Ukraine?," Empirical Economics, Springer, vol. 64(5), pages 2151-2164, May.
    • Handle: RePEc:spr:empeco:v:64:y:2023:i:5:d:10.1007_s00181-022-02320-7
    DOI: 10.1007/s00181-022-02320-7
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    1. Wei-Xing Zhou & Yun-Shi Dai & Kiet Tuan Duong & Peng-Fei Dai, 2023. "The impact of the Russia-Ukraine conflict on the extreme risk spillovers between agricultural futures and spots," Papers 2310.16850, arXiv.org.

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    More about this item

    Keywords

    Russia–Ukraine war; Exchange rates; Energy price shocks; Commodity currencies; cross-quantilogram;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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