The impact of crude oil prices on the inflation rate, exchange rate, and interest rate of emerging oil exporting and oil importing countries

• Main Authors: Lim, Gil Anthony W., Lim, Sharla Michole N., Pascua, Patrick Jayz S., Uy-Barreta, Charles Barry D.
• Format: text
• Language: English
• Published: Animo Repository 2016
• Subjects: Petroleum products > Prices; Inflation (Finance) > Effect of energy costs on; Foreign exchange rates; Interest rates
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/9577
• Institution: De La Salle University

The impact of crude oil price on inflation rates, exchange rates, and interest rates of emerging crude oil exporting countries and crude oil importing countries was tested in this study using the Granger causality test. The variables used in this study are the simple average of the three major crude oil benchmarks in the world namely the Brent Blend, Dubai/Oman, and the West Texas Intermediate (WTI) since these are the mostly traded benchmarks in the oil industry. Also, the countries in the study used different benchmarks and data collection since other benchmarks were not attainable. For inflation rates, the headline inflation rate for each country was used. For the exchange rate, the average exchange rate for each country was used and compared to the US dollar. And for the interest rate, the nominal interest rate of each country was used. The study limits its coverage to a ten-year monthly timeline from 2006 to 2015. Results show that nine out of ten countries were affected by the fluctuations of crude oil prices between 2006 to 2015. Brunei is the only country not affected by the fluctuations of crude prices while Cambodia is the most affected country.