Macroeconomic Drivers of Inflation in South Asia amid Global Oil Price Shocks, Exchange Rate Volatility, and Geopolitical Tensions
This study analyzes 1990–2024 data from seven South Asian nations to reveal that exchange rate depreciation is the primary driver of inflation during global oil shocks and geopolitical tensions, while foreign exchange reserves and current account balances play only limited mitigating roles, suggesting central banks should prioritize exchange rate stability over reserve accumulation to control inflation.