Measuring the causal relationship between the controlling monetary policy(currency sale window)and the parallel exchange rate in Iraq for the period(2004-2022)

Abstract

The study aims to clarify the concept of (currency selling window), as well as to know the relationship between the currency auction and the exchange rate in the Iraqi economy for the period (2004-2022) using Granger causality. As for the research hypothesis, it answered the study question that the currency-selling window in the Central Bank of Iraq has a direct impact on the parallel exchange rate. The study reached a set of conclusions, the most important of which was that there is a causal relationship in one direction from the currency purchase window variable from the Ministry of Finance (p1) towards the parallel exchange rate (1EX). The study concluded with a set of recommendations, the most important of which is working on diversifying sources of income by activating other sectors (industry, agriculture, trade, tourism) and working to reduce dependence on oil revenues because it is a source that is constantly exposed to shocks and relying on other sources (such as fees and taxes) with knowledge of the works imposed on it to avoid harming the poor class.