Inflation Rates and their Impact on Historical Returns for a Sample of Banks Operating in the Iraq Stock Exchange for the Period 2012-2018

• Post by: Muthanna mjdes
• June 3, 2023
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Hassan Haider Almabarak

ABSTRACT

The financial markets in general and the banking sector in particular is one of the most vital sectors in the economy of any country due to its great impact in supplying the requirements of economic development. In addition, attracting the necessary capital to advance the productive and investment reality of the country on the other hand. Since the inflation leads to creating a state of uncertainty among the investor community in the traded financial assets, which is reflected in increasing the risk of investing in those assets, which may negatively affect the stock prices of companies and banks listed in the frameworks of the financial markets (Inflation) on the returns of stocks of banks.  The relationship between inflation and those returns were analyzed using the simple linear regression model.

One of the most important findings of the study is the existence of an incomplete positive linear correlation between the variables of the study (inflation rates and historical returns), which indicates that the banking sector in the Iraqi economy is an attractive environment for investors and a supportive sector for the requirements of growth and economic development as well as the success of the Iraqi monetary authorities. It was shown that the central bank succeed in managing cash reserves, which was crystallized by low levels of inflation during the selected period.

Keywords: Iraq Stock Market, Inflation Rates, Historical Return of Banks, Linear Regression.

Volume 13, Issue 1, Pages 40-54

DOI: 10.52113/6/2023-13-1/40-54