Munich Personal RePEc Archive

Impact of devaluation on Saudi oil exports: The J-Curve analysis

Mahmood, Haider and Alkhateeb, Tarek Tawfik Yousef and Ahmed, Nawaz (2017): Impact of devaluation on Saudi oil exports: The J-Curve analysis. Published in: International Journal of Economic Research. , Vol. 14, No. 9 (10 July 2017): pp. 375-383.


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This research probes the impact of Exchange Rate (ER) and oil prices on oil-exports of leading OPEC country, Saudi Arabia by using Shin’s et al. (2014) non-linear ARDL. We find that world income is helping in increasing Saudi oil-exports and the insignificant impact of ER on oil-exports in linear ARDL is found. Alternatively, a positive ER variable is negatively impacting to oil-exports and an appreciation is result in decrease in oil-exports. Further, in long a devaluation, negative ER, could not help in increasing oil-exports. But, short run analysis expose the existence of W-curve instead of J-curve with devaluation in the non-linear ARDL model and J-curve has been found in the linear ARDL model. Positive Oil prices’ movement is also helping in raising oil-exports and negative movement has no impact. Lastly, the impacts of both ER and oil-prices have the asymmetrical impacts.

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