Abstract

This study postulates that changes in oil prices matters in the magnitude and direction ERPT in the context of the oil-importing and oil-exporting perspectives. This hypothesis is motivated by the growing evidence of the significant response of the exchange rate to changes in oil prices. The short-run and long-run dynamics of the ERTP are jointly captured by the study using an ARDL modeling framework. Using quarterly date from 1990 (quarter one) to 2022 (quarter one), the study’s findings imply that the incomplete dynamic of the ERPT can be generalized in the short run regardless of the oil-exporting and/or oil-importing characteristics of the economy under consideration. In South Africa, changes in oil prices tend to lessen the inflationary effects of ERPT by reducing the magnitude of the EPRT over both the short and long terms, but same cannot be said for Nigeria.

Keywords

Pass-through; Exchange rates; Consumer prices; Oil prices; Nigeria; South Africa