Hatem George Hatem *: Policy of the Central Bank of Iraq for the exchange rate of the dinar for the period 2014-2016 - critical review

The exchange rate of the Iraqi dinar against any foreign currency ( the dinar exchange rate henceforth) means in this paper the amount of the relevant foreign currency necessary to buy one Dinar. [1] As is clear from the title, this paper is concerned with appropriate Iraqi Central Bank 's policy rate of the dinar exchange to discuss during the period 2014- 2016 in light of receding apocalyptic in the dollar value of the oil revenues of Iraq , which resulted in the collapse of the crude oil price during the same period.


This paper is in three parts. The first part focuses on clarifying the location of the policy of the Central Bank of Iraq for the dinar exchange rate among the measures taken to counter the repercussions of the collapse of oil prices during the period 2014 2016 on the course of the Iraqi economy. This section begins by explaining the amount of damage caused by the sharp fall in the price of crude oil after 2014 in the dollar value of Iraqi exports from this resource in the years 2015 and 2016. The paper then goes on to review the measures taken to counter the repercussions of this decline in oil revenues and the associated severe atrophy in the flow of foreign exchange into the national economy. The final section of this section is dedicated exclusively to the dinar exchange rate. It begins with the presentation of the basic parameters of the central bank's policy of the dinar exchange rate and the conceptual framework governing this policy. It then reviews the mechanism adopted by this bank in its management of the dinar exchange rate; The dinar exchange rate against the dollar and the dinar exchange rate against a number of other important foreign currencies during the period 2014-2016, respectively.

[1] Two exchange rate definitions are available. The exchange rate is defined as the price of one unit of the local currency calculated or expressed in foreign currency or the amount of foreign currency required to buy / sell one unit of the local currency. This definition is the most internationally adopted at present
Dornbusch, Roger, Stanley Fischer and Richard Startz. Macroeconomics, op. cit., p. 576.

The following reference shows the motives behind the widespread use of this definition in recent years.
Dunn, Robert M. Jr., and John H. Muttin. International Economics , London and New York: Routledge, 2000, p
The second definition is inverted the first definition. According to this definition, the exchange rate represents the price of one unit of foreign currency calculated or expressed in local currency or the amount of local currency necessary to buy / sell one unit of foreign currency. This definition has been adopted in a number of scientific studies, to name but a few
Catoa, Luis AV "Return to Basics: Why Exchange Rates," Finance and Development, September 2007, p. 48

The Central Bank of Iraq adopts the latest definition of the exchange rate in its official statistics on the dinar exchange rate. See
" Annual Statistical Bulletin " issued by the Directorate General for Statistics and Research of the Central Bank of Iraq. The preparation of this statistical bulletin for the years 2003-2017 is available at

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Hatim G. Hatim - Review and evaluation of exchange rate policy 2014-2016-formated 2

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