The primary purpose of this study is to explore whether changes in oil price are exogenous for small open economy and the significance of the financial variables in accordance with empirical results to discuss the role of monetary policies and implications. Considering the factors of monetary policy of the central banks with respect to the SVAR model, that tries to determine whether oil price shocks have disparaged effects on two small market economies, Taiwan and Korea, and trying to compare the difference and effects of their respective policies. In this paper, the empirical analysis, we found that the oil price shocks is a direct result of a major factor in decline in output, and while the impact of monetary policy effects on output is vague that coincide with Kim and Roubini (2000). In addition, Bernanke et al. (1997) analysis of the central bank encounter with the rise in oil prices in response to raise interest rates, the empirical results in this article: (1) policy implementation between the two countries have a significant impact on oil prices will be affected by the increase in oil prices which led to the implementation of central bank tightening of monetary policy , (2) central bank policy changes on behalf of the discount rate shocks, their impact on the real impact of the output is limited, (3) found that the central bank monetary policy to curb the effect of smaller price increases.