The impact of exchange rate fluctuations on the per capita share of foreign trade in Iraq for the period (2004-2022)
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The study aimed to know the impact and type of relationship between exchange rates and the per capita share of foreign trade and to clarify the extent of the impact of the exchange rate on the per capita share of foreign trade, which is represented by the following equation (exports + imports / population) in Iraq. Where the exchange rate expresses the independent variable (EX) While the per capita share of foreign trade expresses the dependent variable (Y), and to know the impact resulting from exchange rate changes on the per capita share of foreign trade, the Markov model of switching-regime method was relied upon to estimate the regression equation by using the (EViews 12) program. The study found that the first system (Regime 1) was significant for the relationship between (EX) and (Y) and is associated with a positive direct relationship, meaning that increasing exchange rates by (1%) in times of boom or rise leads to an increase in the per capita share of foreign trade by an amount (0.87%). As for the second system (Regime 2), the relationship between exchange rates and the per capita share of foreign trade is inverse, meaning that an increase in exchange rates by (1%) in times of recession or state austerity leads to a decrease in the per capita share of foreign trade by (3.4%), the study recommended that monetary policy should develop a clear policy that works to maintain a high exchange rate of the Iraqi dinar against foreign currencies through the currency auction because the exchange rate is considered the economic strength of the country.
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