Exchange rate and their impact on Iraq's foreign trade for period 2004/2023

Abstract

This study analyzes Iraq's foreign trade developments during the period 2004-2023, focusing on the impact of exchange rate fluctuations on the performance of exports and imports. During this period, the Iraqi economy faced significant challenges due to fluctuations in oil prices, which directly impacted the country's economic stability and trade balance. Furthermore, Iraq's foreign trade remains heavily dependent on the oil sector, given the lack of economic diversification and the absence of effective policies to support non- oil productive sectors. The study aims to understand the dynamics of the Iraqi economy and the factors influencing its performance, with a focus on exchange rate fluctuations and their impact on the competitiveness of Iraqi products in global markets. The study also highlights the most significant obstacles

facing foreign trade, such as challenges related to monetary and trade policies and the heavy reliance on imports to meet domestic demand, which increases vulnerability to external economic changes. The inductive approach was used to present economic data and infer the relationship between exchange rate fluctuations and foreign trade, by analyzing relevant economic indicators, such as the value of exports and imports, inflation rates, foreign exchange reserve levels, and other factors affecting the stability of the Iraqi economy. Official data sources and economic reports were also used to examine general trends during the research period. The study reached a set of conclusions that had a very minor impact on Iraq's foreign trade. The results showed that fluctuations in the exchange rate were not the only factor affecting foreign trade, but rather that other factors such as domestic economic policies, political stability, and the availability of a stimulating investment environment were also at play. The study also emphasized the need to adopt effective strategies to diversify the economic base, support non-oil sectors, and enhance local production capacity, in order to reduce dependence on oil revenues and achieve sustainable economic stability in the long term.