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Analysis of the relationship between the exchange rate and stock market indicators: Evidence from Iraq

Author

Listed:
  • Kamal K. Jawad Al-Shimari
  • Riyad Rahim Reda

    (Ministry of Housing and Municipalities, Iraq)

  • Qasim Mohammed Hammood

    (College of Administration & Economics, University of Kerbala, Iraq
    College of Administration & Economics, University of Kerbala, Iraq)

Abstract

The research seeks to identify the impact of exchange rate fluctuations on the most prominent indicators of the Iraqi stock market, such as market value and trading volume in the market, as these variables affect the activity of various productive institutions by providing the necessary funding to carry out new investment projects or sustain ongoing projects, as well as the possibility of confusing their plans and disrupting the achievement of their set goals in the event of inability to provide the necessary funding. The research studied the theoretical aspect of the exchange rate in general and in Iraq in particular, and the market value and volume of trading in the financial markets and the Iraq stock exchange. As for the analytical side, it relied on the annual data of the exchange rate, which is issued in the form of periodic bulletins by the Central Bank of Iraq, and the market value index and trading volume in the Iraqi Stock Exchange in Iraq for the period 2009-2019. The research reached a set of conclusions, the most prominent of which is that there is a long-term two-way reciprocal relationship between the exchange rate and the indicators of the mentioned financial markets in Iraq, despite the existence of an imbalance in the short time, the research also found that there is a possibility to consider the market value and trading volume indicators as general indicators about the direction of future economic activity in any national economy.

Suggested Citation

  • Kamal K. Jawad Al-Shimari & Riyad Rahim Reda & Qasim Mohammed Hammood, 2022. "Analysis of the relationship between the exchange rate and stock market indicators: Evidence from Iraq," Technium Social Sciences Journal, Technium Science, vol. 29(1), pages 285-296, March.
    • Handle: RePEc:tec:journl:v:29:y:2022:i:1:p:285-296
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    References listed on IDEAS

    as
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    3. Mohamad Youness, 2022. "The Impacts of the Political Uncertainty on the Currency Exchange Rate," Technium Social Sciences Journal, Technium Science, vol. 28(1), pages 414-424, February.
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    More about this item

    Keywords

    Exchange rate; stock market; trading volume index; market value index;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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