The Impact of Oil Prices on Guyana's Real Exchange Rate: An AlphaFold-Decomposition Analysis

Abstract

In 2015, Guyana, a small South American country, experienced a major economic turning point after ExxonMobil identified substantial commercial oil reserves in its waters. By 2020, Guyana had started producing and exporting oil commercially, shifting its economy toward oil exports. A key factor shaping Guyana's economic future is the global price of oil, since it directly impacts the country's export income and government revenue from oil. Subsequently, the effect of oil prices on the real exchange rate now becomes an important issue for Guyana due to the potential to affect the country's economic stability and competitiveness. Therefore, the relevant research question is: (i) to what degree have oil prices impacted Guyana's real effective exchange rate? This study created a decomposition technique called AlphaFold-Decomposition, hereinafter referred to as AlphaFold-D, based on the AlphaFold methodology. Drawing inspiration from AlphaFold's ability to model complex folding patterns with high accuracy, the subsequent methodology provides a more accurate means of decomposing time series into its underlying intrinsic modes than empirical mode decomposition. As such, this methodology is characterized by the integration of AlphaFold's attention mechanisms, multi-stage refinement processes, and noise reduction techniques.

Received: 11 April 2025 | Revised: 13 June 2025 | Accepted: 26 June 2025

Conflicts of Interest

The author declares that he has no conflicts of interest to this work.

Data Availability Statement

The data that support the findings of this study are openly available in https://github.com/doncharles005/AlphaFoldDandtheexchangerate and https://statistics.cepal.org/portal/databank/index.html?lang=en&indicator_id=1901

Author Contribution Statement

Don Charles: Conceptualization, Methodology, Software, Validation, Formal analysis, Investigation, Resources, Data curation, Writing – original draft, Writing – review & editing, Visualization, Supervision, Project administration.