Abstract

Analysis of the Trends of Exchange Rate Changes in the Parallel Market in Some Real Factors on the Iraqi Economy for the Period (2004-2019)

Hasan Khalaf Radhi, Jamal Dawood Salman

Volume: 12 Issue: 2 2022

Abstract:

This study aims to analyze the development of the parallel exchange rate and the real economic factors for the period 2004-2019. The study concluded that the real factors have a tangible impact on the exchange rate movement through a decrease in the gross domestic product due to the decrease in oil revenues as a result of the decrease in oil prices and the occurrence of a deficit in the public budget as a result of the increase in the value of imports over the value of exports and thus the increase in demand for the dollar more than its offer to cover imports in the currency This deficit in demand is financed by the foreign reserves of the Central Bank, which leads to a decrease in those reserves, and since the exchange rate is subject to supply and demand factors, when the demand for the dollar increases more than its supply, it leads to fluctuation in the exchange rate and its instability in light of the weak and insufficiency of the economy’s structure About meeting the need of local demand. The study recommended rationalizing spending in all its forms and imposing a tax on the profitability of activities that have negative effects on the Iraqi economy, that is, unproductive activities.

DOI: http://doi.org/10.37648/ijrssh.v12i02.004

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