Analysis of Foreign Trade Movement and its Impactin Exchange Rate Dinar the Iraqi for the Duration (2004-2021)

Abstract

The research aims to study and analyze foreign trade indicators in Iraq, and their impact on the Iraqi dinar exchange rate. Therefore, the research problem was formulated to answer the question: Does foreign trade movement affect the Iraqi dinar exchange rate? Therefore, the time series was analyzed and the significant relationship between foreign trade indicators and the exchange rate was estimated using the VAR model and the Granger test. The test results for the VAR model showed that there was an effect of the volume of foreign trade on the exchange rate of the parallel Iraqi dinar during the research period. The researcher suggested several Recommendations, the most important of which are: The Monetary Authority in Iraq must take effective steps commensurate with the volume of demand for the dollar, especially in the currency sales window and the inclusion of small traders in foreign transactions that take place via the electronic platform to achieve stability in the exchange rate of the Iraqi dinar against the dollar, and to bridge the gap between the exchange rate Formal and parallel.