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Oil price vs. exchange rate

 
 
AlexR1
 
Reply Sat 22 Oct, 2016 08:15 am
Hello!
I would really appreciate if someone could clarify the following. Assume we are a country who exports oil. On one hand, increase in oil prices results in increase of the exchange rate because the demand for domestic currency increases. On the other hand, high oil prices mean high net exports and from macroeconomics it should decrease the real exchange rate. How to reconcile these two views?
Thank you!
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