Measuring the reciprocal relationship between fiscal policy and the exchange rate in Iraq for the period (1990-2019)

Abstract

        The financial policy is characterized by its great effect on the economic activity. It has interrelationships with other economic policies. But the exchange rate has no less importance than the financial policy in that it has such a great effect on the other policies as it affects the macroeconomic variables. Moreover, there are other mutual interrelationships among the economic policies including that relating the financial policy and the exchange rate. The current study deals with the mutual effect between the financial policy and the exchange rate in Iraq during 1990-2019. The problem of the study is associated with the nature of the political and economic conditions and the problems facing the Iraqi economy, which resulted in a massive increase of public revenues and high inflation rates due to the increased public expenditure, persistent budget deficit and the collapse of the Iraqi exchange rate, especially during the nineties. They cast a shadow over the Iraqi economy and impeded achieving the desired economic and social goals.