Do the Global Oil Price Shocks Affect Somalia’s Unregulated Exchange Rate Volatility?

The aim of this study to investigate the impact of global oil price shocks on Somalia’s unregulated exchange rate volatility. While employing an
EGARCH model, the study found that global oil price shocks have significant effect on Somalia’s unregulated exchange rate volatility. This suggests
that the effect of energy shocks is global phenomenon beyond the control of any regulatory authority and/or trade treats. The results of this paper
provide a notable contribution to the literature of energy economics as well as monetary economics. The research also calls for the need of reforming
and re-building Somalia’s foreign exchange system to withstand the unpredictable shocks of the global oil markets. Furthermore, this study implies
that even in times of war and lawlessness, we cannot escape the effect of global energy price shocks. This is an interesting noble contribution that
would be worth considering in the energy and economic literature