2 research outputs found
Impact of Financial Liberalization on Financial Depth in Iraq
This paper examines the Mackinnon-Show hypothesis i.e. financial liberalization promotes financial depth in case of Iraq. Iraq launched a comprehensive program of economic and financial liberalization since 2003. Thus, this paper aims to answer the key question that “is financial liberalization stimulated the financial depth in Iraq?”. By applying the ARDL Autoregressive Distributed Lag model on quarterly data during the period 2005- 2010, the paper finds that the liberalization of interest rates as a proxy of financial liberalization stimulated the financial depthonly in the long-run in the case of Iraq.
Foreign exchange market pressure index and monetary policy in Iraq
This paper’s aims are to adequately measure a foreign exchange market
pressure index that can be used to discover pressures in the Iraqi foreign
exchange market early on, and to examine the effect of monetary policy
intervention in the Iraqi foreign exchange market. The modelling approach
used is Autoregressive Distributed Lag (ARDL), with monthly time series data
spanning 2013-2017. The index used in this paper was able to identify
different periods of pressure in the Iraqi foreign exchange market. In
addition, the econometric analysis found that the traditional proxies for
monetary policy intervention in the foreign exchange market, such as
domestic credit and money multiplier, were ineffective in the case of Iraq.
The results show that the Central Bank of Iraq (CBI) relied extensively on
foreign reserves to mitigate pressures in the foreign exchange market. Due
to the nature of the Iraqi economy and where the main source of foreign
currency is oil exports, the CBI adopted a fixed exchange rate regime to
control inflationary expectations and stabilize the foreign exchange market