Question

Briefly discuss how health policy responses to the COVID-19 pandemic will affect the currencies of oil producing countries across the globe.

Answer 1

The COVID-19 pandemic is now wreaking havoc on financial markets. The instability of the oil market has reached crisis rates in addition to the economic impacts of national lockdowns, transport bans, high unemployment , low demand for consumer goods and drastically reduced business activity. Although OPEC members agreed to slash supply by 23 per cent earlier this month in May and June, oil prices continued to fall and obscure global market outlooks. This week's crude oil prices have been negative for the first time in history, due to insufficient demand for oil and the looming lack of global storage capacity.

Countries which are net oil and gas exporters that experience the greatest shock from the COVID-19 crisis. This is the largest single negative oil price shock in modern history.

On top of that as far as emergency situation is concerned it is prime necessity to provide healthcare policies to the local citizen. Health policy responses to the pandemic are causing a very large drop in global demand for oil, which has driven down major oil exporters' oil prices and foreign-currency revenues. The economic response to the textbook is a sharp fall in the foreign exchange rates of oil exporters' currencies.

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