Impact of petroleum Price Volatility on Algeria's Economy: Analysing Currency Rate and Inflation amid Global Disruptions (2019-2023).

This manuscript investigates the effects of Saharan Blend petroleum price fluctuations on Algeria's economy from April 2019 to December 2023, amidst disruptions like global health crisis and the battle in Ukraine. It employs two MTNARDL models: the first explores the effect of petroleum prices on the currency rate, while the second analyzes the consequences of variations in petroleum price on inflation using the Customer Price Index. The results reveal non-normal distributions in the time series data, significant structural breaks, and a unidirectional causal relationship between Saharan Blend petroleum price and the currency rate. Notably, petroleum prices also play a crucial role in influencing inflation as well. The findings highlight Algeria's economic fragility due to its reliance on oil revenues and stress the necessity for diversification to mitigate vulnerability to external shocks. Recommendations include developing alternative sectors to enhance economic resilience.