The Impact of the Exchange Rate on the Commercial Sectorin Iraq for the Period 2013-2023

Abstract

This study aims to analyze the impact of the exchange rate on the trade sector in Iraq during the period from 2013 to 2023, focusing on the impact of exchange rate fluctuations on foreign and domestic trade. To analyze the relationship between the exchange rate and trade variables such as exports, imports, expenditures and revenues, the EViews12 program, the simultaneous equations model and the three-stage least squares (3SLS) method were used to analyze the data. In the theoretical framework, the concepts of the exchange rate, its types and the factors affecting it were reviewed, in addition to the importance of the trade sector in promoting economic growth. As for the practical side, the data were analyzed using advanced statistical methods. The results show that the rise in the exchange rate has a positive impact on exports, making them more competitive in global markets. In contrast, the rise in the exchange rate has a negative impact on imports and revenues, as it increases import costs and reduces local purchasing power. In addition, the rise in oil prices has a positive impact on exports, which is consistent with the Iraqi economy's heavy reliance on oil exports. Based on the results, it is recommended that Iraq work on diversifying its export basket to reduce dependence on oil exports.