The Impact of Digital Transformation on Enhancing the Effectiveness of Monetary Policy and Achieving Financial Stability in Iraq for the Period(2017-2025)

Abstract

The study aims to develop and apply an econometric model to examine the impact of digital transformation on enhancing the effectiveness of monetary policy and achieving financial stability in Iraq. The study employs quarterly data covering the period from the first quarter of 2017 to the second quarter of 2025. The Autoregressive Distributed Lag (ARDL) approach is utilized to estimate the model, and the findings reveal interesting results that challenge conventional assumptions. The study concludes that digital transformation represents one of the most effective pathways for improving monetary policy efficiency and achieving financial stability in Iraq, particularly in light of the structural challenges facing the Iraqi economy. This underscores the need to adopt supportive digitalization policies within an integrated institutional and regulatory framework.