Abstract

This study explores the impact of Saudi Riyal devaluation on the country’s oil exports utilizing the J-Curve phenomenon as a theoretical framework. The J-Curve theory suggests that a currency devaluation initially worsens a country’s trade balance before improving it over time. In the context of Saudi Arabia a significant oil exporter this research investigates how a devaluation of the Riyal influences export volumes and revenues in the short and long term. Through a combination of econometric analysis and historical data the study finds that while the immediate effect of Riyal devaluation can lead to a decline in oil export revenues due to increased costs and contractual obligations a subsequent period of adjustment tends to improve the trade balance. This adjustment is attributed to enhanced competitiveness and increased demand for cheaper oil. The findings contribute to a deeper understanding of how exchange rate fluctuations affect oil-dependent economies and offer insights for pol