The Effect of the Foreign Currency Sale Window on the Exchange Rate in Iraq for the Period 2004–2016.

• Post by: Muthanna mjdes
• October 16, 2022
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Sabah Rahim Mahdi, Amal Abdel Hassan

Al-Muthanna University / College of Administration and Economics

Abstract

Through the use of the currency sale window, the monetary authority succeeded in controlling the exchange rate and reducing the exchange gap between the official price and the parallel price, thus maintaining a relatively stable exchange rate for 2004-2015, thus stabilizing prices and purchasing power in the Iraqi economy. However, the success of this tool was at the expense of pressure on the international reserves of the Central Bank in light of the large consumer spending by the government, in return for declining oil revenues, which is the only source of foreign exchange offer. Which makes the exchange rate in the future is also unable to maintain the stability of prices and reduce inflation, so the Iraqi currency is threatened to collapse. But it remains the only effective tool of the monetary authority under the special circumstances experienced by the Iraqi economy.

DOI:10.52113/6/2019-9-1/133-146