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How do energy price hikes affect exchange rates during the war in Ukraine?

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Abstract

The Russia–Ukraine war and new sanctions against Russia have created economic losers and winners. Supply chain shocks are made by two factors: the market’s extraordinary swings and the breadth of commodities exported by Russia and Ukraine including energy and raw material. This paper adopts the cross-quantilogram approach to visualize the effects of energy price shocks on the exchange rate movements during this war. Our findings indicate that energy price hikes are associated with the appreciation of the Canadian dollar against the Euro and Japanese yen. Considering the ongoing war in Ukraine, the best feasible policy responses are discussed.

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Acknowledgements

This is to acknowledge that we don’t have any financial interest or benefit arising from the direct applications of this research.

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Authors and Affiliations

  1. Graduate School of Economics and Management, Ural Federal University, Yekaterinburg, Russia

    Amin Sokhanvar

  2. School of Economics and Management, Nanchang University, Nanchang, China

    Chien-Chiang Lee

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  1. Amin Sokhanvar
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  2. Chien-Chiang Lee
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Correspondence to Amin Sokhanvar.

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Sokhanvar, A., Lee, CC. How do energy price hikes affect exchange rates during the war in Ukraine?. Empir Econ 64, 2151–2164 (2023). https://doi.org/10.1007/s00181-022-02320-7

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