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The effects of COVID-19 on the interrelationship among oil prices, stock prices and exchange rates in selected oil exporting economies
This paper re-examines the performances of stock prices, oil prices and exchange rates in twelve oil exporting countries amidst the ravaging consequences of the ongoing worldwide coronavirus pandemic. Consequently, the study adopted a panel Vector Autoregressive (pVAR) model which applied data from...
Autores principales: | , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Elsevier Ltd.
2022
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9096178/ https://www.ncbi.nlm.nih.gov/pubmed/35582200 http://dx.doi.org/10.1016/j.resourpol.2022.102744 |
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author | Kumeka, Terver Theophilus Uzoma-Nwosu, Damian Chidozie David-Wayas, Maria Onyinye |
author_facet | Kumeka, Terver Theophilus Uzoma-Nwosu, Damian Chidozie David-Wayas, Maria Onyinye |
author_sort | Kumeka, Terver Theophilus |
collection | PubMed |
description | This paper re-examines the performances of stock prices, oil prices and exchange rates in twelve oil exporting countries amidst the ravaging consequences of the ongoing worldwide coronavirus pandemic. Consequently, the study adopted a panel Vector Autoregressive (pVAR) model which applied data from the pre- and post-COVID-19 periods. Contrary to the pre-COVID-19 pandemic period, the pVAR Granger causality test indicates that the stock market can as well affect the exchange rate market, though positively. Furthermore, the Impulse response functions (IRFs) shows that a shock to crude oil prices provokes a negative response by exchange rates in the post-COVID-19 pandemic era only. The Forecast Error Variance Decomposition (FEVD) estimates that such innovations to crude oil prices account for the varying fluctuations in exchange rates and stock returns at different periods, but is neither influenced by the stock market activities nor the exchange rate market in the post-COVID-19 pandemic era. This suggests that before COVID-19, the different markets in the selected oil producing economies were only affected by their market fundamentals and dynamics only, but this changed with the plummeting oil prices in the COVID-19 pandemic era. The development of vaccines and the immediate vaccination of the world people will ease the lockdowns and increase the demand for crude oil by the high oil importing countries. With the improved earnings from this, and the associated appreciation of the local currencies against the US dollars, the capital market activities of these net oil exporting countries improve. Policy makers and investors should consider the dynamics in the oil market while making decisions. |
format | Online Article Text |
id | pubmed-9096178 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2022 |
publisher | Elsevier Ltd. |
record_format | MEDLINE/PubMed |
spelling | pubmed-90961782022-05-12 The effects of COVID-19 on the interrelationship among oil prices, stock prices and exchange rates in selected oil exporting economies Kumeka, Terver Theophilus Uzoma-Nwosu, Damian Chidozie David-Wayas, Maria Onyinye Resour Policy Article This paper re-examines the performances of stock prices, oil prices and exchange rates in twelve oil exporting countries amidst the ravaging consequences of the ongoing worldwide coronavirus pandemic. Consequently, the study adopted a panel Vector Autoregressive (pVAR) model which applied data from the pre- and post-COVID-19 periods. Contrary to the pre-COVID-19 pandemic period, the pVAR Granger causality test indicates that the stock market can as well affect the exchange rate market, though positively. Furthermore, the Impulse response functions (IRFs) shows that a shock to crude oil prices provokes a negative response by exchange rates in the post-COVID-19 pandemic era only. The Forecast Error Variance Decomposition (FEVD) estimates that such innovations to crude oil prices account for the varying fluctuations in exchange rates and stock returns at different periods, but is neither influenced by the stock market activities nor the exchange rate market in the post-COVID-19 pandemic era. This suggests that before COVID-19, the different markets in the selected oil producing economies were only affected by their market fundamentals and dynamics only, but this changed with the plummeting oil prices in the COVID-19 pandemic era. The development of vaccines and the immediate vaccination of the world people will ease the lockdowns and increase the demand for crude oil by the high oil importing countries. With the improved earnings from this, and the associated appreciation of the local currencies against the US dollars, the capital market activities of these net oil exporting countries improve. Policy makers and investors should consider the dynamics in the oil market while making decisions. Elsevier Ltd. 2022-08 2022-05-12 /pmc/articles/PMC9096178/ /pubmed/35582200 http://dx.doi.org/10.1016/j.resourpol.2022.102744 Text en © 2022 Elsevier Ltd. All rights reserved. Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active. |
spellingShingle | Article Kumeka, Terver Theophilus Uzoma-Nwosu, Damian Chidozie David-Wayas, Maria Onyinye The effects of COVID-19 on the interrelationship among oil prices, stock prices and exchange rates in selected oil exporting economies |
title | The effects of COVID-19 on the interrelationship among oil prices, stock prices and exchange rates in selected oil exporting economies |
title_full | The effects of COVID-19 on the interrelationship among oil prices, stock prices and exchange rates in selected oil exporting economies |
title_fullStr | The effects of COVID-19 on the interrelationship among oil prices, stock prices and exchange rates in selected oil exporting economies |
title_full_unstemmed | The effects of COVID-19 on the interrelationship among oil prices, stock prices and exchange rates in selected oil exporting economies |
title_short | The effects of COVID-19 on the interrelationship among oil prices, stock prices and exchange rates in selected oil exporting economies |
title_sort | effects of covid-19 on the interrelationship among oil prices, stock prices and exchange rates in selected oil exporting economies |
topic | Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9096178/ https://www.ncbi.nlm.nih.gov/pubmed/35582200 http://dx.doi.org/10.1016/j.resourpol.2022.102744 |
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