The Impact of Currency Devaluation on Oil Sector Performance in Pakistan

In this study we have investigated the impact of devaluation on the oil sector performance in Pakistan. We used time series data of 37 years from 1985 to 2018. The sample of study is oil sector of Pakistan. The dependent variable is oil sector performance while independent variables include Gross Domestic Product (GDP), Foreign Direct Investment (FDI), inflation, exchange rate, oil price, tax revenue, oil imports and trade. Different statistical techniques such as ADF Test and ARDL approach were used to analyze data. The findings of this study show that the oil prices have statistically significant positive relationship with exchange rate. We also found that there is strong relationship between oil prices, exchanges rate, FDI and inflation rate. The devaluation worsens balance of payment, inflation and public duebt.