The Impact of Money Supply M1 on Balance Exchange Rate of The Iraqi Dinar

Abstract

The Economic literature demonstrates that established nations' monetary policies may significantly impact almost all economic indices in emerging markets. First, the purpose of this article is to evaluate the possible effects of fiscal and monetary policy on Iraq's balance of payments. Second, the paper examines how these exchange rates are priced during an expansionary monetary policy phase to understand better how unconventional instruments impact them. The analysis indicates that the Iraqi economy became burdensome with the various economic problems represented by high inflation rates, high volume of external indebtedness, and deterioration of the exchange rate of the Iraqi dinar and others. The results also reveal the mismanagement of the ruling regime, whose decisions focused on strengthening the fragile pillars of its rule. The decisions made were political before they were economical and targeted the regime's interests before they were aimed at the interests of the economy.