The impact of exchange rate fluctuations on the trade balance in Iraq for the period (2004-2020)

Abstract

The research aims to clarify the impact of fluctuations in the foreign exchange rate on the Iraqi trade balance during the period (2004-2020). The dollar against the Iraqi dinar, as well as analyzing the situation of the trade balance in Iraq during the period (2004-2020), in addition to measuring and analyzing the relationship between the foreign exchange rate and the Iraqi trade balance through the use of modern standard methods represented by using the autoregressive distributed delay time (ARDL) model. The research problem focuses on knowing the extent of the fluctuations of the exchange rate of the dollar against the Iraqi dinar during the study period and the reflection of these fluctuations on the trade balance, in both parts of non-oil exports and total imports. ), and that the significant increase in dependence on oil exports led to the deepening of the principle of unilateralism of the Iraqi economy without working to diversify exports, and the analytical side showed that reducing or raising the foreign exchange rate does not affect the volume of oil exports because their prices and quantities are determined globally according to the forces of supply and demand While raising the foreign exchange rate affects the reduction of unnecessary imports. While the standard side and the results of the long-term response showed that there was a weak negative inverse effect between the exchange rate and non-oil exports in Iraq, the results of the long-term response showed a significant effect between the exchange rate and imports in Iraq.