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Do the Global Oil Price Shocks Affect Somalia s Unregulated Exchange Rate Volatility?

Author

Listed:
  • Mohamed Ibrahim Nor

    (Faculty of Management Sciences, Simad University, Somalia,)

  • Tajul Ariffin Masron

    (School of Management, Universiti Sains Malaysia (USM), Malaysia.)

Abstract

The aim of this study to investigate the impact of global oil price shocks on Somalia s unregulated exchange rate volatility. While employing an EGARCH model, the study found that global oil price shocks have significant effect on Somalia's unregulated exchange rate volatility. This suggests that the effect of energy shocks is global phenomenon beyond the control of any regulatory authority and/or trade treats. The results of this paper provide a notable contribution to the literature of energy economics as well as monetary economics. The research also calls for the need of reforming and re-building Somalia s foreign exchange system to withstand the unpredictable shocks of the global oil markets. Furthermore, this study implies that even in times of war and lawlessness, we cannot escape the effect of global energy price shocks. This is an interesting noble contribution that would be worth considering in the energy and economic literature.

Suggested Citation

  • Mohamed Ibrahim Nor & Tajul Ariffin Masron, 2018. "Do the Global Oil Price Shocks Affect Somalia s Unregulated Exchange Rate Volatility?," International Journal of Energy Economics and Policy, Econjournals, vol. 8(2), pages 154-161.
    • Handle: RePEc:eco:journ2:2018-02-20
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    References listed on IDEAS

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    2. Siti Inayatul Faizah & Uus Ahmad Husaeni, 2018. "Development of Consumption and Supplying Energy in Indonesia s Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 8(6), pages 313-321.

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    More about this item

    Keywords

    Exchange Rate Volatility; global oil price; unregulated exchange rate;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment

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