Analyzing the Impact of Oil Price Shocks on the Exchange Rate Fluctuations in Pakistan

An oil-importing country is anxious about large oil imports. Importing countries must pay enormous foreign exchanges, which can suffer from the balance of payments. The long-term economic stability like Pakistan and a rise in prices may be impacted. With changes prices, importers see their strength fluctuating developing economies. Many industries are connected with oil, they directly linked because petroleum prime production source. This study found that shocks affected by variations demand risk significantly contribute to exchange rates. In contrast, supplies have almost no impact. link between pricing rates has increased following global financial crisis. results depict price do not explain change rate volatility, but this documents significant exchange-rate volatility connection. research investigates how shock aggressively impacts Pakistan’s economy. research, method defined connection currency Data was collected relevant websites 1 January 2013 31 May 2021. Appropriate econometric techniques were used achieve goal concerned. Finally, helped concerned stakeholders adopt policies Pakistan. Subsidies on also affect market expenditure Government tighten deficit; therefore, marketed accordingly.