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Crude Oil Price Shocks, Exchange Rate Regimes and Monetary Policy in African Oil Producing Countries

Author

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  • Adetona Sikiru Adedeji

    (Central Bank of Nigeria, Nigeria)

  • Mojeed Olanrewaju Saliu

    (Ekiti State University, Nigeria)

Abstract

This study investigated whether exchange rate regimes and interest rate policy have a significant explanatory power of oil price implications on African oil producing economies. Data for the study were sourced from World Development Indicators published by the World Bank and International Monetary Fund (World Economic Outlook). The study used a four variable Structural Vector Autoregressive (SVAR) model. Findings from the SVAR impulse response functions revealed that no exchange rate regime is the best, and no one is bad for African oil producing countries, judging from the costs and benefits that are associated with the three major exchange rate regimes. Findings from the study equally confirmed that expansionary monetary policy is more effective in insulating against and compensating for the negative effects of the shocks associated with the global oil price in the selected oil producing countries in Africa.

Suggested Citation

  • Adetona Sikiru Adedeji & Mojeed Olanrewaju Saliu, 2020. "Crude Oil Price Shocks, Exchange Rate Regimes and Monetary Policy in African Oil Producing Countries," European Journal of Business and Management Research, European Open Science, vol. 5(5), September.
    • Handle: RePEc:epw:ejbmr0:v:5:y:2020:i:5:id:50509
    DOI: 10.24018/ejbmr.2020.5.5.509
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