Analyzing and measuring the effectiveness of quantitative monetary policy tools on the money supply in Iraq for the period (2004-2023)

This research aims to analyze and measure the effectiveness of quantitative monetary policy tools on the money supply in Iraq over the period (2004-2023). This is done by examining the impact of various monetary tools, such as the interest rate, legal reserve, and open market operations, on the money supply. The importance of this research stems from the pivotal role of monetary policy in stabilizing economic growth and achieving growth, particularly in light of the challenges facing the Iraqi economy due to fluctuations in oil revenues and the general financial situation. The research relied on the Autoregressive Distributed Lag (ARDL) model and cointegration tests to measure the relationship between monetary policy tools and the money supply in the short and long term. The research concluded that some quantitative tools of monetary policy, including (the legal reserve ratio and the discount rate), are effective tools, and contribute to controlling monetary stability within the country and controlling the local exchange rate against foreign currencies. The research recommended the necessity of diversifying monetary policy tools by the Central Bank of Iraq, and reactivating tools that are no longer used, while granting the bank more independence, as well as integrating fiscal and monetary policies and developing the financial market and the banking system, with a focus on monetary tools with a short-term impact in dealing with crises that occur in the real market, so that the response to these measures is rapid, in addition to spreading banking awareness among the public to ensure achieving economic stability.