The effect of the managed floatation of the exchange rate on the bank liquidity index Iraq is a case study for the period 2010-2019))

Abstract

The managed floating exchange rate is one of the means by which the monetary policy objectives of achieving monetary stability in any national economy can be achieved. Through the exchange rate channel, the central bank can maintain the general level of prices and the income level within the economy and thus control the level of exports and imports from During the control of the exchange rate and the amount of currency sold in the auction, The controversial question raised by the research is whether there is an effect of the managed floating exchange rate and the bank liquidity index. The researcher was able to measure the impact and correlation relationship between the two variables during the study period (2010-2019) and reached a number of results, the most prominent of which is that there is a significant correlation between the window exchange rate and the ratio of loans and advances to total deposits, while there is no correlation relationship to the exchange rate. The window with the ratio of liquid assets to total assets, as well as the research showed that there is no correlation of the parallel exchange rate and the amount of sales with the index of bank liquidity. The research revealed that there is no significant effect on the window’s exchange rate or the window’s sales quantity on the bank liquidity index through the parallel market price. The research recommended the activation of the monetary policy role of the Central Bank in Iraq in a way that it can influence the banking sector to increase banking stability and thus increase monetary stability, as well as the necessity of preserving the effective exchange rate for the important role it plays as it has a positive emotional relationship