The Effects of the Oil Price Shock on Inflation: The Case of Kazakhstan

Authors

  • Dinmukhamed Kelesbayev Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakstan.
  • Kundyz Myrzabekkyzy Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakstan.
  • Artur Bolganbayev Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakstan
  • Sabit Baimaganbetov Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakstan

DOI:

https://doi.org/10.32479/ijeep.13061

Abstract

Increases in oil prices cause inflation. Interest rates are expected to decrease as a result of the expansionary monetary policies of the central banks in response to the indirect effect of increasing oil prices on inflation. Because an increase in oil price creates an additional foreign currency inflow to Kazakhstan, this leads to the appreciation of its national currency tenge. Therefore, this study uses monthly Brent Oil Price (OP), Consumer Price Index (CPI), and Real Effective Exchange Rate (REER) values for the period 2015:M1–2021:M11 to investigate the effect of oil price on inflation and real exchange rate in Kazakhstan. Analysis are performed using the Structural Vector Autoregression (SVAR) model. The results showed that while the Real Effective Exchange Rate mostly affects the Oil Price, the Consumer Price Index variable affects the Real Effective Exchange Rate.

Keywords:

Oil price, Structural Vector Autoregression, Inflation, Real Effective Exchange Rate, Kazakhstan

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Published

2022-05-18

How to Cite

Kelesbayev, D., Myrzabekkyzy, K., Bolganbayev, A., & Baimaganbetov, S. (2022). The Effects of the Oil Price Shock on Inflation: The Case of Kazakhstan. International Journal of Energy Economics and Policy, 12(3), 477–481. https://doi.org/10.32479/ijeep.13061

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Articles