The Relationship between Oil Prices and Exchange Rate: A Systematic Literature Review

Oil is among the enormously vital and most traded commodities globally, involving many forex transactions in the face of various types of shocks attributable to geopolitics, supply, demand, market crisis, etc. This study uses a systematic literature review approach to explore the Literature from the SCOPUS database considering the relationship between oil prices and exchange rates by analyzing the papers from 1998 to 2022 and includes the final 123 papers. This study emphasizes three objectives; Literature developed so far, standard methodologies and findings, and the research gaps which can be pursued in further studies. Findings show that vast literature is developed around these variables and sub-topics in various dimensions, such as the stock market, gold prices, economic growth, etc. Research around the variables has increased in the recent past, indicating the continued relevancy of the relationship. However, it can be due to increased access to higher education and research. This study also finds the gap in the literature and has implications for the policymakers in monetary and fiscal policy planning, as well as investors across the globe in making portfolio management strategies.