The Impact of the Trading Balance on the formation of Foreign Reserves at the Central Bank of Iraq

Abstract

International reserves are considered as one of the crucial issues nowadays especially in the Iraqi economy. It is counted among the essential tools for protecting the national economy from shocks and economic crises the nation may face. Since the Iraqi economy is rentier, which depended mainly on oil export, this led to the correlation of the foreign financial reserves with the oil revenues, and then with the commercial and the payments scale. This requires a wise administration of the obtained revenues towards properly fulfilling the development objectives.