Iraqi Journal For Economic Sciences

The paper attempts to explore the functioning of foreign exchange market in an oil dominated economy with a pegged exchange rate as a nominal anchor. Some mainstream theoretical models and empirical findings are presented to understand the Iraqi arrangements and policy, through an international perspective. Also, the paper addressed the essential components of foreign exchange operations of the central bank, highlighting the interconnections between the government budget and the central bank balance sheet.
The accounting and behavioral aspects of the private sector demand for foreign exchange are carefully considered in terms of international reserve , monetary base, and money supply.
Furthermore, the research work deals with the real appreciation of the Iraqi dinar and its economic consequences. In this regard, bilateral real exchange rates of the Iraqi dinar with the major currencies are computed for the years 1988-2003. Furthermore, positive co-movement of oil price and real exchange rate of Iraqi dinar and correlations with real exchange rates of other currencies are investigated.
Considering the crude oil price sharp decline and huge budget deficit, due to limited non-oil source of finance, public debt monetization will be constrained by the international reserve of the central bank, the fact that this paper confirms. The need for institutional changes in the budgeting and regulatory set of the financial sector has become very clear as a necessity for fiscal sustainability and foreign exchange market stability.

Business world has known as a scientific shift in banking strategies in the last few decades, and that was a logical consequence of the technological revolution in communication and the globalization of financial markets and banking. This may led the financial and banking institutions to trend towards providing new type of services, in line with what banking market characterized by. Hence, some felt that banks should develop their performance, in line with the circumstances surrounding this development, which is represented in Electronic Banking.
The research launched from the problem of non-implementing of Electronic Banking in Iraq, as it is in Arab and world Banks. To study the reasons of non-spreading the Electronic Banking services, we prepared a questionnaire, included three main axes. Axis one focused on the danger of using electronic banking services. The second axis explains the basics of the success of e-banking and the third axis refers to the obstacles of implementing e-banking.
Questionnaire questions were divided into three groups: the first question from each group was the dependent variable and the rest of the questions were the independent variable, adopting SPSS statistical analysis method to calculate the mean and standard deviation. The study found a group of conclusions .The most prominent one is that there is a desire of using E- banking by the customers. But, the lack of e-banking services definition will lead to customer’s fear of using this type of services, and to avoid the risks that may result from accessing the information network by unauthorized users, and this is a prove that the major responsibility for non- spreading of electronic banking services in Iraq rests on the bank itself .

After many changes, which the world countries witnessed, regardless of their level of development in all areas and in the economic field, in particular, and across time periods not so short , the governments of those countries became aware that they must undertake many appropriate regulations, and in various levels to meet these changes, seeking by that to follow the accelerating global pace, which leaves behind a lot of those who does not do what is proper with that, and it is represented, in general, in adopting different multi-faceted policies in terms of the impact, in order to work on creating the right and required environment, according to the size of the changes and the expected effects from them.
And especially those related to economic reform, and what the latter requires for designing the programs, and identifying the necessary means to be implemented, while giving importance to those experiences attributed to these countries, which have achieved successes in this area (reform) to take advantage of them in terms of adapting what has been implemented to reach the desired goals, and serving their own designed programs, in addition to not neglecting those experiences that have not achieved success, as well as it will benefit from studying the factors that led to the failure, or obstructed their success at the desired level and significance.
What has been just stated is applied on the Iraqi reality, in general, and its economy, in particular, as what has been accumulated within it – over years considered not to be short - from inappropriate effects, resulting from imbalanced levels of the performance of various governments, which successively managed its economy, made the latter to be in an urgent need to achieve a radical reform for transforming from a one-sided (yield) economy to a multilateral one, taking advantage of the changes (which can be accurately identified by the latitudes, and, in particular, since the eighties of the last century) in the price of the main (and the most important) source of its budget revenues, represented in oil, to establish the right and scientific base for its infrastructure for enabling the country to rely upon it, to build a strong economy with a diversified productive structure, in contrast to what it was existing before, and what it is present.