The Impact of Oil Price and Oil Volatility Index (OVX) on the Exchange Rate in Sub-Saharan Africa: Evidence from Oil Importing/Exporting Countries

The Theory demonstrates that oil price and volatility (OVX) are significant determinants of economic activity; however, studies seldom consider both variables in the oil–exchange rate nexus ignore distributional heterogeneity exchange rate. We investigate their joint effect employ quantile regression Markov switching models to address this. differentiate between positive/negative shocks control for global financial crisis 2008 COVID-19 pandemic 2020. observe OVX significantly impact all countries whereas, only affect importing countries. Rising (falling) causes local currency depreciate (appreciate). rising or falling is same exporting whereas varies. on affected by market conditions. responds mostly at lower quantiles (bearish markets) countries, which reveals investors sensitivity. In contrast, a weak no response observed higher (bullish market). Our results robust model selection (Markov models).