The Impact of Oil Price Shocks on Oil-Dependent Countries’ Currencies: The Case of Azerbaijan and Kazakhstan

The paper aims to assess the relationship between Azerbaijani and Kazakhstani exchange rates crude oil prices volatility. study applies structural vector autoregressive (SVAR) model. concentrates on Azerbaijan Kazakhstan, post-Soviet countries considered as some of most oil-dependent in Caspian Sea region. impulse response functions suggest that rise is associated with decrease thus an manat tenge appreciation against U.S. dollar. Moreover, results price increase leads international reserves. However, are insignificant for foreign Additionally, reveals a negative significant USD/KZT both pre-crisis COVID-19 crisis periods. We reveal correlation has been stronger during pandemic. not case manat. USD/AZN rate stable since 2017, first phase pandemic caused change weakening currency, despite drops prices.